All Forum Posts by: Kiera Underwood

@Taylor L. Cash flow isn't negative, but it's low! My thought is that if cash flow increase is possible, appreciation is likely and the property is in good condition then it could be there right fit for someone. I understand your vote though! 

@Erik W. Well said! I like to layer strategy as well. I've got a property in mind that has some opportunity to increase cash flow or return (vacant lot that could be developed or sold off immediately) and rent rate could be pushed a bit as well. So, I think there's room for both. I typically look at lower end and max cash flow, but I think the balance here may be that when the remodel is done for you, you pay more! 

How do you all feel about multi that doesn't have incredible cash flow as-is but that's rehabbed, in a stable market and in an area that should have a bit more appreciation than other areas of the city? I've run into investors who don't mind because they plan to put more down and just want a safe place to park cash especially while inflation appears to continue to be on the rise. They seem to emphasize appreciation, the areas of value add on the property, and tax shelters. However, I have others that shudder at the thought of net income of ~$500/month when they put 25% down on 850k. I'm curious what you all see as pros/cons and how much weight you place in each category.

@Brian M. It takes a bit of evaluating to feel ready to pull the trigger. I'd start looking at everything that comes up that even comes close to your criteria, decide why it would or wouldn't work for you. Get comfortable understanding what questions you should be asking and how you should be looking at things. That way when the right property does come along it's not too much too fast! 

@Tommy Ray I see you've got some experience in the Lawton area. Have you looked to OKC at all? 

@Sawyer Smith

OKC is in the same boat but our metro population is much bigger at around 1.4 million. So, I'm not sure it's "small town" but certainly regional. After a short shut down we've stayed open and tenants have been able to work, pay rent and move into new properties! Our inventory did drop and we're in a seller's market but overall cap rates are good and price points are still very competitive. C class areas from 60-100k are generally at 7% cap rates.

I'm curious to hear how other cash-flow-focused markets that are more conservative are doing? Anyone want to chime in? 

@Kiet Ho lending is so inexpensive right now that I feel like you could get further utilizing lending. That said, if you're shopping in a really competitive market doing cash offers may be what wins your contracts. Are you shopping in Alabama? 

@Patrick Flanagan I'm OKC all the way! Like most markets inventory is tough and you've got to be aggressive to lock something down right now. I'm a big fan of all off-market stuff for that reason. For reference in this market I'm seeing A class duplexes for ~5% caps and I'm aware of a remodeled 12 plex property in a path of progress area for ~6% cap. So, the numbers aren't where they were pre-corona but they're not bad especially when you compare price point to other markets. 

@Brian M. why not utilize conventional if you're doing under 4 units. I'd try to get away with house hacking it if possible. Bringing only 5% down (plus what you pay over asking/appraisal in order to lock down a deal in this crazy seller's market) allows you to buy another sooner! Is that an option at all? 

@Brian M. I second what @Kenneth Garrett said. Reporting the income of your rentals should offset debt to income. If you have issues with that commercial is the way to go. I've got lenders in OKC that are helpful in projecting/advising around what you'll need income wise to offset. What market are you in?