All Forum Posts by: Michele Velazquez

Quote from @Michele Velazquez:

Quote from @Wale Lawal:

@Michele Velazquez

You should have your own investment goals and look for multifamily deals that fits in your investment goals.

Multifamily deals can be analyzed through various matrix like NOI, Cap rates, IRR etc.

Each investor looks for specific matrix depending on their investment goals.

I suggest that you clearly define your criteria and what you are looking for.

Based on the area you choose, a local Investor-Agent can help shorten your learning curve and save you a lot of headaches as they tend to understand the market better.

All the best!

 Totally agree.  And I do have my investment goals determined.  Just had this question.  I am still narrowing down the city I am interested in but then of course will be building my core 4

I recommend you look into Houston, TX.

The income and appreciation in Houston are growing at a steady pace.

I personally have rentals in Houston, and the surrounding areas of Spring and Conroe.

Good luck!

@Michele Velazquez

You should have your own investment goals and look for multifamily deals that fits in your investment goals.

Multifamily deals can be analyzed through various matrix like NOI, Cap rates, IRR etc.

Each investor looks for specific matrix depending on their investment goals.

I suggest that you clearly define your criteria and what you are looking for.

Based on the area you choose, a local Investor-Agent can help shorten your learning curve and save you a lot of headaches as they tend to understand the market better.

All the best!

Quote from @Michele Velazquez:

Quote from @Alex Bekeza:

@Michele Velazquez Looking for a strong rent to price ratio is important but you also want to make sure you're not trading perceived cash flow potential for significant capex which wipes clean your profits.  I bring this up because a lot of midwestern markets come to mind with very old buildings which are going to exceed the 1% rule but you'll want to be very thorough in your due diligence to identify any potential capital expenditure issues up front.  

 Great advice.  This is something my relator will help me with when we do inspections correct?

 Hopefully your realtor will have a referral for a solid inspector.  My guy in STL is shockingly thorough and he's one of my favorite people to refer others to because I always know they'll be impressed.  

Quote from @Brandon Goldsmith:

The 1% rule is a good metric to use but I would keep in mind all factors. If a property is very under rented and doesn't hit the rule but would if the rents were at the market is often times a situation that investors ignore the potential. There are a handful of markets you might want to check out here in Ohio that would still hit that metric @Michele Velazquez

 I agree with Brandon! There are also places here in the Ohio markets that bring great cashflow and appreciation. 

Quote from @Michele Velazquez:

Quote from @Kevin Polite:

Quote from @Shane Kelly:

You can find close to the 2 percent rule on market here in Cleveland. If you look off market, you can find it even easier. I think you're looking in the wrong areas/cities. Because class of area matters too. Where I find 2 percent on market it's usually a B- to C- area. If you're looking at A, you're not gonna find anything. Even here.

 Cleveland is perfect example. No disrespect, but it has lost population for the last 70 years so home prices would tend to be cheaper with higher cash flow. I think those are the trade offs you have to make. I doubt you get 1% here in Atlanta in class C 

Kevin, in your opinion would Cleveland be good for me if my goals are cash flow and decent appreciation? Also, where can I find more information about class a, b, c?  I am new and haven't seen that in my books but do see it coming up here?  There is so much to learn but I really want to buy something and put my money to work!

All of my properties are no more than 15 minutes away from where I live as I self manage. For me, it would be extremely difficult to invest in an area I know nothing about or couldn’t check out on a regular basis, but that’s the control freak in me. I know others that are quite comfortable doing that. I don’t know enough about Cleveland to advise one way or another. 
Class A are the most expensive and have the highest rents. Class B & C  in my definition, are the bread & butter. I like finding properties in C areas that I believe will become B in 3-5 years. It’s all relative as what I call C someone else would call D. D cash flows the best, but usually aren’t safe and have renters with subpar credit. 

@Michele Velazquez Looking for a strong rent to price ratio is important but you also want to make sure you're not trading perceived cash flow potential for significant capex which wipes clean your profits.  I bring this up because a lot of midwestern markets come to mind with very old buildings which are going to exceed the 1% rule but you'll want to be very thorough in your due diligence to identify any potential capital expenditure issues up front.  

Quote from @Shane Kelly:

You can find close to the 2 percent rule on market here in Cleveland. If you look off market, you can find it even easier. I think you're looking in the wrong areas/cities. Because class of area matters too. Where I find 2 percent on market it's usually a B- to C- area. If you're looking at A, you're not gonna find anything. Even here.

 Cleveland is perfect example. No disrespect, but it has lost population for the last 70 years so home prices would tend to be cheaper with higher cash flow. I think those are the trade offs you have to make. I doubt you get 1% here in Atlanta in class C 

You can find close to the 2 percent rule on market here in Cleveland. If you look off market, you can find it even easier. I think you're looking in the wrong areas/cities. Because class of area matters too. Where I find 2 percent on market it's usually a B- to C- area. If you're looking at A, you're not gonna find anything. Even here.

It seems the 1% rule of thumb, in today’s market, only applies in cities where there is slow to no growth in terms of population and job growth. Fast growing large cities like Austin & Atlanta or smaller like Boise, where homes are appreciating due to the increase in jobs and population, 1% is just not possible. 10 years ago during the depth of the recession, yes, but not today. You can still make money and find deals that cash flow but it’s difficult. These types of cities will continue to grow and real estate assets in those cities will appreciate much more than slow/no grow cities. 

There’s are so many more factors that go into buying a property than the 1% rule. That is out dated and was primarily used to pencil a property in 10 seconds