Quote from @Account Closed:
Hey everyone,
Looking to buy LTR in the US. Cash in hand and also pre-approved if I go financing route.
Please keep in mind, anything that is sent to me will go through extensive checks via different resources I have, so please let's be practical and realistic about everything.
Let me know if the below exists today:
Dos
Must be ~A neighborhood, and I hope to be one of the less expensive houses in the neighborhood
Open to renovation - Rather have turn key
Minimum 1M, ideally 1.25-1.5M
Must be off market deal under inflated market
Do nots
No STR / AirBNB based asset - Don't tell me that the asset will make 7% if I AirBNB it
Not in vacation markets!
Not in a market that has appreciated 50% in the last 24 months
Not Multi-Family or Condo
Please do not BS me with comps of different neighborhoods and hypothetical rental yield that based on what the mansion on the beach rented for 2 years ago or what it has been doing on AirBNB.
Only things that can easily be compd to long term rentals
Ready to pull the trigger on a deal, please don't waste my time and I promise I won't waste yours
Below are examples of price to rent I am looking for:
Home price - Rental price
1M - $7,000 / month
1.1M - $8,000 / month
1.2M - $9,000 / month
1.35M - $10,000 / month
1.45M - $10,500 / month
1.55M - $11,000 / month
Hi Daniel.
My gut and my experience tell me that to push your cash flow on a LTR to this point, you need a high-risk multifamily property in a bad area that likely has significant deferred maintenance. But if you aren't worried about that, I think it's doable.
It may be doable for a SFH - again, with a lot of problems. Likely you will need to purchase 10-15 cheap SFH's to get to $1M, and the problems will keep you up at night. If you want to do this, check Flint, Michigan, bad parts of Detroit, Mobile, Alabama and various other comparable parts of the country that have high crime rates. They tend to have higher returns for your dollar. But please don't take this as advice, as it's incredibly risky and usually ends poorly.
I use to go cheap on things. I'm stubborn, so it took me a long time to truly learn the high cost of doing so. I don't mean this as condescension. Just a friendly warning from one investor (and an agent) to another investor. I use to get high LTR returns in bad areas. I know many other investors that lean toward low cost, high return, high risk. Eventually, I realized I prefer lower risk, low to moderate returns and moderate to higher cost.
The white elephant- the rare solution to this, where you don't lose sleep and get a great return like you are seeking, is when you "luck" into a situation where you make a once in a life time purchase with a crazy low price, because a seller is desperate, stupid or both, and lets a property go at 1/3 of its value. This doesn't happen with active properties on the MLS, so you have to nurture this behind the scenes, on your own.
I hope you prove us all wrong. Seriously- good luck. Please tell us if you crack the code on this and are able to put something together. I'm rooting for you.
