Hi Bob,
I live in California and have my investments in St. Louis, MO. Started investing there in 2012 and now have 10 tenants across 8 properties. The net cap rate is between 18.57% (for the earlier properties) up to 41.78% (for the latest investments, as of this writing). The prices (including repairs) ranges from $25,631 for single family residence up to $47,217 for duplex. The rents range from $500/month to $750/month.
When I first made my cashflow strategy in 2012, I planned on investing $155k per year (roughly 5 properties at average price of $31,000/property) for five years to bring in an additional $3,000/month in rental income (roughly an average of $600/m for each of the 5 properties), mostly in single family residences.
As of this writing I have a fourplex in escrow for $40k and a triplex for $38k. Some issues came up on the title and the closing has delayed a bit, but if we manage to close escrow successfully, the fourplex already has 3 tenants in it paying $450/month each and the triplex already has two tenants paying $650/month each. If everything goes well with these deals we'll be bringing in $2,650/month( $450 x 3 + $650 x 2) after the first month of closing on a $78k investment (which is a lot less than my initial estimate of $155k) and up to $3,700/month ($450 x 4 (fourplex) + $650 + $650 + $600 (triplex)) once occupancy is at 100%.
My wife and I manage the entire operation from a Google Sheet. We spent the most on repairing the first investment ($17,276), which we bought for $20,731 than any other property thereafter due to the lack of experience. Additionally on that same investment I sent $600 to an AC service provider that I found on craigslist and he never did the work, but we took that deal as a learning experience.
After the first deal I looked for other service providers on craigslist, tested them with small jobs and kept the ones that I felt comfortable working with. I've been to St. Louis three times since 2012. The first time was on a weekend to verify that there were actually houses standing there selling for $20k. The second time was to check on the completed repairs of our first investment and sign the paperwork with our first tenant. And the third time was in 2013 to do an open house on two of our new investments that had just been brought up to rental status. That was all the school we needed to learn that market and the rest is history.
In my specific case, my strategy in the St. Louis, MO market is strictly cashflow from day one and it doesn't really matter to me if the properties don't appreciate a penny, as long as the cashflow is consistent. Your strategy may be completely different, but I'd recommend that you buy two properties, if at all possible, with your $150k (about $75k each). If you're new to this, more than likely you will learn a great deal from your first investment. Then you can apply all that learning to your second and subsequent investments.
