All Forum Posts by: Julie Philpott

Hi all!

My husband and I are looking to buy our first ever real estate investment out of state (we live and rent in NYC. we do not want to buy here due to high cost of properties and high tax rates). I'm looking for advice and input on whether our initial strategy idea seems sound--

We have up to $400k cash to invest in a property (this is aside from other cash reserves that we want to keep on the side). With mortgage rates being so high, we'd like to do an all-cash purchase in a house with a good balance between cash flow and appreciation. Our thought here is that we will cash flow enough to cover property taxes, insurance, and management fees and possibly net $500-$1000 per month in profit. Since we won't have a mortgage, our hope is the property will appreciate over a few years and when (hopefully soon) mortgage rates come down, we can do a cash-out refinance on the home and invest in additional property(ies).

Does this seem sound? It seems hard to find any property these days that will meet the 1% cash flow rule in the US, so financing at 6-7% and not cash flowing doesn't appeal to us as a strategy - but is there something we're missing here where we should definitely lever up?

We've researched 10-15 different markets and we keep zeroing in on Columbus, OH as a good balance of appreciation and enough cash flow to cover expenses plus a little bit of profit. Our priorities in terms of market is there needs to be

- anticipated economic growth (lots of tech companies are moving into Columbus),

- prices need to allow us to buy in all cash (400k or less, ideally up to 300k),

- we want the area to be safe (when looking into places like Dayton, OH or Memphis, TN for instance it looks like all our boxes are checked on paper, numbers wise but we realized quickly there are a lot of unsafe areas and we could have the potential for problem tenants)

- yearly expenses to be relatively low (i.e. we are avoiding NYC and the tri state area, California, etc. for having extremely high taxes).

Is our initial analysis on the right track for Columbus? are there any other markets you would suggest that hit our criteria? We are initially looking at single families to start out but is a duplex a better option for some additional cash flow, or 2 smaller single families?

Thank you so much!