All Forum Posts by: Account Closed

Thanks @Robert Martin, do your clients have problems like higher expenses, damages, evictions, higher turnover, more vacancy?

@Account Closed, I'm neither a rocket nor a surgeon.  Can you explain why cap rates are useless for SFRs?  That's not obvious to me.  My understanding is that cap rate is your returns, pretty much regardless of your financing choice.  That seems valueable to me to know.

@Mario F. A price to rent ratio is just the opposite of a rent to price ratio.  I've been listening to BP's podcast and they suggest using the 1% test for rent/price.  It's a rule of thumb for when you're looking at lots of properties.  If your rent/price ratio is less than 1%, it's unlikely that you'll cash-flow.  Greater than 1% (.01) is the goal, so in terms of price to rent ratio, that would be less than 10.

Those files are best opened in Excel, google sheets, or Numbers if you have a mac.  It'll organize by columns and rows for you.  You can then try to sort.

Okay that's what makes sense to me.  If one partner owes $500 in taxes and the other owes $400, both get a distribution of $500.  This keeps distributions equal, and nobody has to pay taxes out of pocket.  Thanks for the info!

Thanks for the input.  Generally speaking, what kind of cap rates are you able to achieve?  What kind of cash flow?

That's all good information.  Thanks for sharing. Are there any resources about oil job forecasts or anything like that?  

Welcome to bigger pockets!

Okay, that lines up with what I've been told. I just wanted to confirm that.   Also, as far as distributions to cover income tax, if we split our equity and distributions evenly, then we would just distribute to each owner the highest amount of tax owed of any owner.  Are there other ways to treat this?  Thanks for the info!

Hey Mario, to answer your question, I found a list of price-to-rent areas on Zillow. I did a bit of research with their spreadsheets.  Here's the link:

http://www.zillow.com/research/data/

Basically, the price-to-rent ratio in Bakersfield is the second lowest of all metro areas in California.  If you pay less for a given amount of rent, you probably have a higher chance of cash-flow.  I also lived in the AV for a few years.

Remember that all the advice really just boils down to what your goals are.  If your main goal is to get a property in LA to live in and avoid paying rent, then that limits you to a choice of properties that are less ideal for investing.  I'd just say look for the best deal that suits your criteria.  Sounds like fun.  Good luck with the condo!

Edit: the data that you might specifically look at is the "Price-to-Rent Ratio" spreadsheet organized by zip code to check out specific areas in LA.

Hi WV BP,

I've been doing some research and both Morgantown and Charleston have come up on my radar a few times. I'm seeing that there's good job growth, income growth, low taxes, low unemploymnet, etc. I'm curious, what are some typical ROIs you're able to achieve in WV? I'm interested in SFR buy-and-hold. Local investors, what can you tell me? Thanks!
Christopher

Hey BP,

I've been researching various cities, and it seems like Terre Haute has a low median house price with a high median rent. My question is whether you think this is sustainable for a long-term investment. I'm looking for a buy-and-hold SFR property. In a lot of economic indicators, it looks to be on par with average job growth, pop growth, income growth etc.  Local investors, what can you tell me?