All Forum Posts by: Justin Sheppard

That said, Tulsa, Oklahoma and Oklahoma City provide a lot of 1-2% opportunities. Certainly a lot of America’s “Midwest” or simply non coastal areas do too.

Not sure if you are looking to come south of the border or not. I’m just a proud believer in my local market :)

Hey Nate, thanks for the feedback. I'd be interested in chatting with you to learn more about OKC. I enjoy myself some CP3 and Shai Gilgeous Alexander OKC Thunder basketball, which makes me a bit more excited about the idea of investing there. I'll reach out!

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Thanks for the response, Mark! I'd love to approach investing the way you are describing here, but my main downfall is that I really don't have any handy-man skills (really regretting not taking woodworking and construction in high school, lol). Thus why I'm leaning towards a newer build or farmland.

My goal is a blend of both, although it seems like the property appreciation is the more likely option for me, seeing that my analysis is showing that positive cash flow is not going to be attainable (initially), but that should change as rental prices trend upwards.

Do you do a lot of the repairs yourself, or do you hire out the work?

Hope all is well!

Originally posted by @Mark H. Porter:

Neither would attract me. I have never even used the 1% rule in my 23 years of playing this game. I can't tell if your goal is wealth through appreciation or wealth through cash flow. In my case, I buy properties that need work as it scares others. I buy at a great price, concentrate on repairs that are first, regulatory (fire, electrical code), second, raise the rents to market max, and lastly, just makes it prettier (landscaping, fencing, paving). I get very high appreciation as NOI increases so I could either sell or simply soak up the high cash flow.

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Thanks for the feedback, Ryan! Saskatchewan is indeed a great place. I'm leaning towards doing both of these investments, and glad to hear some feedback that they are both decent when considering they fail the 1% "rule". The area I am looking to purchase the farmland in has several high end tenant prospects, so I don't expect that I'd ever have a difficult time finding a renter. But I do agree, a newer neighborhood with a house close to a school should theoretically be very easy to find a tenant.

Hope all is well in Washington!

Originally posted by @Ryan Xu:

It'll depend. There is no golden rule for 1%. A higher population density metro will more likely to have a lower rent/price rate due to the higher potential of appreciation and higher liquidity (easier to sell).

In your case, both sound good. I'll definitely choose the 1st property to invest in. Although as you said, 2 may have less chance to depreciate for land, and it cost you less on initial investment or on cash flow. The reason I am choosing 1 is considering it's easier to find a tenant for a house than farmland. Especially if that's a decent neighborhood, you'll have more potential to get better appreciation.

Saskatchewan is nice, I almost moved there 9 years ago.

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Hey everyone,

I'm slowly but surely digesting lots of the videos and podcasts provided by the BP team. One thing I have found interesting is the 1%-2% "rule", which I will acknowledge the BP team has made clear is not necessarily something that should be blindly followed. However, for curiosity, I've been applying it to houses in my home city of Regina, Saskatchewan (Canada), as well as to some farmland properties.

My first question is: is anyone aware of any markets where there are good investment opportunities that are meeting the 1% to 2% rule?

I've put together a few examples below. I'm curious to see if people feel like the rent to price ratio in my market is too high? Or would some of you still consider these good investments?

SCENARIO 1:

2017 built 1,700 sq ft two storey home in a nice neighborhood. Close to schools, shopping, etc. Four beds, 3.5 baths, nicely landscaped.

Price: $450,000.00 CAD

Gross Monthly Rent: $2,200.00 to $2,700.00

Percentage Range: 0.488% to 0.6%

THOUGHTS: This isn't even coming close to 1%. However, the neighborhood and rental price range should theoretically attract good tenants. Also, the cap-ex should be lower overall as it is a new and quality build. This scenario produces negative cash flow of around $100 per month out of my pocket.

SCENARIO 2:

160 acres of grain producing farmland in Saskatchewan. Good location in a good farming community, within 1 hour drive of the capital city of Regina, SK.

Price: $175,000.00 CAD

Gross Annual & Monthly Rent:$55 per acre X 150 cultivated acres = $8,250.00 per year, $688.00 per month.

Percentage: 0.4%

THOUGHTS: Again, this isn't coming close to the 1%. However, farmland is nice because the asset doesn't depreciate (as long as you have a good tenant who properly farms the land, and you have not purchased any buildings on the land). Also, management is very hands off, as tenant pays half in the Spring and half in the Fall. This scenario produces a small amount of negative cashflow, around $10 per month out of my pocket.

I'm curious to hear your thoughts on these scenarios, and whether or not you apply the 1% or 2% rule when you are picking properties to invest in? What other things do you consider when picking a property?

Thanks all, and I hope you've all enjoyed your weekend!

Justin

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Hi Lydia,

Thanks for the warm welcome. Great to meet a former Saskatchewanian.

Justin

Originally posted by @Lydia S.:

@Justin Sheppard

Welcome to BP! I’m Sask born and raised and enjoyed Saskatoon for 6 years. Good luck with your business and future investments!

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Hey Mark,

Thanks for the warm welcome. I'm excited to meet more Saskatchewan based people on here!

Justin

Originally posted by @Mark Neudorf:

Hey Justin, welcome to BP. There are a number of Saskatchewan investors here, there are even a couple multi family investors.
I’m also a REALTOR up in Saskatoon and would be happy to connect sometime

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Hi Ryan,

Thanks for the warm welcome. Look forward to connecting with you.

Justin

Originally posted by @Ryan Myers:

@Justin Sheppard

Welcome Justin, there is so much to learn here, the site and people are great! Let’s connect sometime!

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Hi everyone,

I've been diving into the BP podcast since discovering it a few weeks ago, and I was pleased to discover this website and forum. I'm looking forward to learning more about the opportunities out there in the residential real estate world of investing. I am a Canadian real estate agent based in Saskatchewan where myself and my family team specialize in farm and ranch land real estate. The idea of investing in residential property has always been of interest, but I just never took the time to learn. Now here I am, ready to take it all in and hopefully contribute back to this community as much as I have received already via the podcast.

Look forward to learning great things with you all, and ultimately witnessing the success of all involved here.

Justin

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All Forum Posts by: Justin Sheppard

Justin Sheppard has started 3 posts and replied 18 times.

Post: Thoughts About The 1%-2% ?

Post: Thoughts About The 1%-2% ?

Post: Thoughts About The 1%-2% ?

Post: Thoughts About The 1%-2% ?

Post: Introducing Myself to The BP Forum!

Post: Introducing Myself to The BP Forum!

Post: Introducing Myself to The BP Forum!

Post: Introducing Myself to The BP Forum!