Is there any market that still meets the 1% rule?

[Gagandeep Singh]

I am looking for long-term rental property investment opportunities but none of the cities that are published as best places to invest meet the 1% rule. I looked into Huntsville, AL, and Columbus, OH which are referred to as the best places to buy real estate recently. Am I missing something? 

[Alecia Loveless]

@Gagandeep Singh If you analyze lots and lots of deals you should eventually turn up some that are stronger than others. I've had two in the past five months that are at the 2% level. One has needed about $60,000 in work but will be a power house when I go to BRRRR it around December.

The second I’m getting ready to close on shortly and the appraisal came in right on point and we’re taking a leap of faith in the amount of money we have to put into it that down the road we will get that back out. This one when all is said and done needs around $90,000 in work.

I think right now there’s a lot of greedy sellers who just think the sky is the limit and don’t care that their buyers need a return on their money. Which if you can pay cash and assume you will get your cash back when you sell is fine but if you need a mortgage you still have certain margins you need to meet.

I see a lot of people singing the praises of the Midwest markets for good returns but just tonight there was a post about one investor who was three years in and waiting to break even.

Investing is a long game. It takes time. It takes patience. If you rush into a deal just to buy something you will get burned for sure. I definitely wouldn’t buy anything that didn’t meet my criteria. So make sure you have set your criteria and you stick with it even if you do change markets.

If you change markets build your team first or part of your team, and then start searching for good deals. If you find a good deal and have no team it’s a lot harder getting things together.