All Forum Posts by: David Olson

@Sterling Fields no question is stupid. The entry price point vs what it will rent for are not ideal compared to other markets. The appreciation is great but the cash flow is poor in my opinion anyways. Not to mention the high property taxes as well and here in Katy there are 3 triplex properties all owned by the same investor. This according what I have been told through public record anyways. 

@Jordan Moorhead the rent to purchase price ratio doesn't work as well here as it does in other areas. Compared to other markets, the 2-4 unit space here is very thin. Which is why I flipped a property that sold in February. The market is great for flips though but they are becoming harder and harder to come by here. 

@Alyssa Weber I think that's where I'm at. The point to where I just need to make it happen. Glad things are going well for you in Louisville! Are you primarily in the 1-4 unit space or diving into the commercial field as well? 

I 120% agree building a team is most important! A bad team in a great market will make that market look dismal.

@Jeremy Taggart I plan to fly to whichever 2 cities I choose so I can have face to face meetings and drive the area. I figure doing this will help immensely and would be money well spent.

@Jeremy Taggart Good point. Where does someone find real life data publicly available? Or are you referring to DOM, price trends, supply, etc. as the real life data?

@Account Closed Never thought of it that way but your example of NY couldn't be better. I think I could be overthinking it on trying to predict what may or may not happen. 

Hello BP,

My Question: Which cities are prime for cash flowing 1-4 unit properties and what metrics specifically do you use and from what site? Census Bureau? REIT reports? etc.  

Anyways, I'm working on selecting 2 cities to heavily pursue for out of state rentals. Once selected I'll be booking my flights and spending some time in each city hopefully meeting some quality people that I can work with and bring value too. I have reserves that I am ready to deploy but the data I am collecting from PWC, and Real Wealth Network is conflicting with some cities I hear others say they love to invest in. So I started to read through this column written by Real Wealth Network. https://www.realwealthnetwork.com/learn/best-places-to-buy-rental-property

As I was reading through the article I couldn't understand why anyone would invest in cities like Pittsburgh, Cleveland, Detroit, Cincinnati, St. Louis, etc. Mainly because they claim that those cities have a projected 5yr equity growth below the national avg, 6yr population growth below the national avg, and a 1yr job growth below the national avg. Maybe the data only pulls from the city limits and not the surrounding areas?

With that being said, my main goal right now is cash flow, cash flow, cash flow so equity growth is not the leading driver in my decision but a nice to have.  I had a good friend tell me to invest for appreciation instead but that's another argument for another day.

Other cities I am considering are Birmingham,Huntsville, Indianapolis, Boise and a few others. Really trying to narrow down my search to ONLY 2 cities but the more I read the greater my paralysis by analysis becomes.  Here is a table I have put together from some data collected by PWC. The Rent/ Cost of Ownership is the market apartment rent divided by the median mortgage payment, including estimated taxes, insurance, and maintenance.

 If you can find a park that is master metered you have a great value add on your hands by individually metering each pad. Also the shed idea mentioned above is a solid one. Rent a shed on wheels that you can drop on a tenants lot at $25 per month. Once they fill it up with their stuff they will likely keep it full and when it comes time to decide whether to clean everything out or pay the $25, most will just keep paying.

@Alex J. my long term goal within real estate is buy and holds but this partnership was created on the agreement that we would only flip. Long story short, my friend and partner in the deal approached me with the idea. I had always kept flipping in the back of my mind as a way to create more capital so when I was approached by my partner to exclusively flip I figured why not!! 

@Tony Castronovo thanks!! Our next project we will be walking the house with our electrician for sure.

@Matt Millard our next primary residence I plan to use the 203k approach. Taxes for flipping can climb and I agree with you 100% but hypothetically speaking, if at some point we are paying $300k a year on taxes from flips then we are likely doing something right. Flipping isn't my long term goal either but it will help me get to my long term goal.

@Lance Langenhoven they removed my post. I guess I violated the advertising rule. It was not intentional by any means. I will shoot you a private message shortly. 

@Alex Bekeza since it was a flooded home they wanted to know about mold. We ended up getting a mold remediation certificate before the sheet-rock was installed so that answered that question. We installed commercial grade mold resistance sheet-rock in both bathrooms as well. I am sure you've seen where small mold spoors can grow on the ceilings above the shower due to the steam in the shower over a long period of time but our sheet-rock wont allow that to happen. We ended up putting all new PEX water lines in with a master manifold in the garage so each water source in the home has its own shut-off valve. We also ran a new gas line to relocate the washer and dryer. That's just to name a few and some of these were direct questions. Sometime they would just ask, "So what all did you do to the home?" at which point I would go into great detail so they knew we went the extra mile. It helped that I was involved and knew the little things that might go unseen to the naked eye.