All Forum Posts by: Michael Magee

@Andrew Garcia. Thanks for the reply.  

There was a ton of apartment complexes built in this area over the last few years, and I attribute of the rental lag to that.  I had really expected the rates to track the cost.  Higher interest rates haven't helped either.  Financing the typical (in my area) $300K 3/2 went from $1100mo to $1600mo, but rents did not track up that much.  I have been successful with my current tenants in getting a 7% rent hike.  If I can do that year over year for a while, I may be able to catch up (as long as rental market comes along).

BRRRR's are even harder. There is nearly no rehab houses in this area. I keep my eye out for them as well. I am little nervous about getting out of my backyard. But I might have to do that find the right rental market.

Does anyone count principal pay down as part of ROI. It don't really see it mentioned much.

I am in the Raleigh/Durham NC market.   <2018 there were a few 3/2 houses here and there in sub $200K range.  Putting them in the .8-1% range. I was able to pick up a few.  Now, the home prices are rising so fast, that rents are not keeping up.  I am searching everyday for a deal that can cash flow.  But the home prices are so high and rents are not reaching anything close to 1%.  Most back of the napkin calculations put the houses at 0.5%-.07%.  Putting almost every deal into negative cashflow.

To make matters worse, inventory is very low.  There are almost no homes under $300K.

Has anyone had success in this type of environment?  Is there strategy that works in this kind of market?  Do I tolerate negative cash flow and take advantage of appreciation?    Will rents catch up?  

The market has changed and I don't know how to evolve my strategy.