I'm trying to create a buy and hold summary to distribute to partners, i.e. Realtors. What do you thinking of the following:
[b]Goal:
Increase portfolio of single family residences to provide additional passive income. The overall goal is to increase portfolio to the point of providing a $X gross income per month
[/b]Focus:
1. Properties must provide positive cash flow. I’m following a rule that states that the monthly rental income has to be, or greater, than 2% of the property cost.
2. Ideally looking for properties where costs are less than 50% of income.
3. Owner financing where possible, due to Fannie Mae restrictions.
4. Leverage property management due to physical location of investment properties. ( Ie. out of state)
5. The main focus is positive cash flow but I’m rejecting areas with stagnant or depreciating property values.
6. Purchase undervalued properties to gain instance increase in LTV after renovation.
[b]Avoidance:
1. “C” class areas, ideally looking for “nice neighborhoods” or up and coming.
2. Older properties due to excessive maintenance costs.
3. Multi family, condos or anything with an HOA.
4. Areas where vacancy rates are greater than 10% per annum
5. None of the following in close proximity:
a. Rail Roads
b. Busy Streets/Highways
c. Flood Plains
6. Rapidly decreasing populations, i.e Cincinnati.
