All Forum Posts by: Matthew Pruitt

So how did the subdivision pan out for you? I'd be interested in discussing in more detail. I'm interested in doing something similar in the Las Vegas area.

Can we ask who your contractor is? $80-100 a sq ft is pretty good in this market.

@Caleb Heimsoth Rents look like $850 for that property. 

I've considered new for the fact that capital expenditures should be low. But my real difficulty is finding a property that actually cash flows when you take into account the mortgage payment. And I haven't yet found a turnkey that will. At least not using conservative estimates like the 50% expense rule and 10% vacancies. 

Is it possible anymore to find properties that cash flow $300+/mo after expenses and mortgage, without having to do a complete rehab? Or probable?

I don't want to be a downer on the market, but I also don't want to rush out and buy property and lose my investment. I've heard that expenses are always more than you plan for, especially when using a property manager that makes money when you make repairs.

I'm looking for deals that pass the tests taught here on BiggerPockets. First, I'd like a property with monthly cash flows of 2% of the purchase price. I realize more often than not rents will not reach that level, but I want at least 1.5% to give me some security.

Then I would like some built-in equity. Following the 70% rule, I'm looking for a property that I can acquire for 70% of its after repair value, minus the costs of repair. Without this I don't think BRRR is possible, and without BRRR I don't see this as a scalable business.

@Caleb Heimsoth A turnkey that costs 65k and rents 850, is only a 1.3% rent to purchase ratio. And an $80k turnkey with 800 rents is only 1%. Is it an income-producing property that could make someone $$? Maybe. But turnkeys only pencil out for me if I take out my financing costs. I'll believe cash buyers can make money with turnkeys, but for most investors that want to use leverage, the numbers just don't pan out. 

Here's an example of a turnkey analysis I ran on a property the Realtor in Memphis sent me. It was barely posted and is already under contract at $110k. No way its worth that. This Realtor also told me that turnkey properties sell all the time in Memphis only to have expenses catch up with the investor and be sold off for less than they were bought for. 

I'm new to real estate investing. Been looking into the Memphis market as it's supposedly a hot market for rents. But as I run the numbers on most properties, they leave very little cash flow after expenses and the mortgage. 

I spoke to a Realtor and was told that investors have been unrealistically running up home values in the area. He also told me that if he finds a really good deal he's going to buy it himself instead of letting me see it. 

Anyway, it seems like there are too many turnkey investor groups in Memphis that are buying up all of the deals, so there's nothing left on the market for investors who aren't willing to go through the turnkey groups. Has anyone else seen this? Is it worthwhile going through what's on the market and submitting dozens of low-ball offers to see if one sticks? I'm mostly looking for positive cash-flow properties, but would like to have a built-in equity position, and the lower price would obviously help with cash-flow.