All Forum Posts by: Mike D'Arrigo

@Dustin Murphy scaling to $5k, $10K $20K in cash flow is no easy task and as you've already noted, will require a lot of properties if you try to do it though SFR's. To get to the level that you want, I would strongly consider small to medium apartments that will generate significantly more cash flow. You should also consider short term rentals like @Ben Firstenberg suggested. They do not have to be in vacation markets however. People who stay in STR's do so for a lot of reasons besides vacation. Any market that has a lot of visitors can potentially be a good STR market. I like Kansas City for STR's. Kansas City gets 37 million visitors a year.

@Chris Kendrick Real estate returns come from 4 sources. 1. Cash flow 2. Appreciation 3. Mortgage paydown and 4. Depreciation. Wealth is built over time. Upfront equity, if you can get it, is icing on the cake. If everyone had to rely on upfront equity for their returns, there wouldn't be so many people making so much money in real estate. 

@Alon A. I'm not an expert on the markets that you've listed but what I can tell you is that TX has some of the highest property taxes and insurance rates in the country. FL has some of the highest insurance rates. These two operating expenses alone  can have a significan impact on your cash so be sure you are properly accounting for them. 

BRRRR is a good strategy for those that are local and have the time to manage a rehab project but it's not right for everyone. No one strategy is right for everyone. Managing contracters has always been a challenge. Managing them in today's climate with serious labor shortages is exceptionally difficult. BRRRR isn't for everyone and there is no gaurantee there will be equity left in the deal. Turn key is a good strategy for those that are investing out of state and have limited time to devout to finding properties, determining their renovated values, determine a scope of work and a budget for the construction. There's a lot of moving parts and a lot can go wrong for inexperienced investors.

@Rosario Aiello start by defining and quantifying your objectives and criteria. Once you've clearly done that, it will narrow down your options and bring some clarity to the process. Once you've done that, idetify states that have low to moderate property taxes and insurance rates and are landlord friendly. From there, you can drill down to the market level and start evaluating markets with growing populations, growing jobs, strong incomes and modern/diverse economies and industries. These are the markets that will offer the best opportunity for price appreciation and rental increases. The Midwest is generally going to offer the best appreciation, however, not all Midwest markets have what I would consider good economic and demographic trends. Personally, I like Indianapolis, Kansas City and Davenport in the Quad Cities. We've been active in all 3 of those markets. If either of these are on your radar, I'd be happy to chat about the merits of the markets and help.

@Alecia Downing It depends on your objectives and criteria but I typically recommend market with with affordable prices and growing populations, jobs, strong income and modern/diverse economies and industies. These are the markets that will not only cash flow well in the short term but also give the best opportunity for long term appreciation and rental increases. That's where your real wealth with come from. I'm partial to markets in the Midwest like Indianapolis, Kansas City and the Quad Cities. We've been active in those markets for over 10 years. I'd be happy to share my advice and help if you want to reach out and connet. 

@Richard Pallarino I agree with @Rich Hupper. Why are you limiting yourself to Section 8 tenants? I can't speak for Racine or Detroit, but there are plenty of good areas in Indianapolis and Cleveland where can get market rent tenants. 

@Mike Deemer I wouldn't count on the market being different in March like in normal market conditions. I'm not sure how you would take a big loss by selling it immediately if you are all in for $400K. My guess is that you should be able to break even or come close. Indianapolis is a a good STR market but without knowing anything about the property, I'd be real skeptical of netting $3000-$3500 a month. You need to dig in to that more. Ask him what average daily rental rate and occupancy rate he is that projection on. Personally I would opt to sell now.

@Randy Glenn Have you clearly identified your objectives and criteria? The 3 markets that you mentioed couldn't be more different on nearly every level that it tells me that you may not have a clear criteria. Dallas ad Detroit don't usually show up on the same short list. We've been active in the Kansas City market for about 10 years and know it well. You can get in to a solid rental there for around $140K-$160K on a 3Br SFR. I'd be happy to share some insight and help if you want to connect.

@Malachi Chapman why do you think you can get below market value because of interest rates? If there's a softening in the market and prices come down, you're not buying below market. You're buying at whatever the current market bears.