Diversifying geographically can also reduce risk and increase long-term returns.For example, there are several markets across the U.S. that are ideal for new investors because they offer affordable entry points, reliable cash flow, and strong economic fundamentals.

Many local businesses that operate in the downtown area by the state park (including some famous attractions) close for the winter or reduce hours.

This reduces exit options and affects the value. 10) Small number of small units is the most expensive residential development there is.

. $360k equity (based on your estimated loan balance and estimated transaction costs if you sold, this is not calculating capital gains taxes but that would reduce your equity down to about $310k if you sold without doing a 1031 exchange). $8k cash flow (this will increase over time because you are in an appreciation market). $6k principal pay down (based on your current loan). $20k appreciation (based on 3% which is conservative, 4-5% is the historical average).

Purchase price: $715,000 Cash invested: $297,000 Current Listed Price: $830,000Original Listed Price: $950,000 (4/13/2024)It has been reduced $120,000 in the las 6 months and hasn’t sold.

We have had to reduce nightly rates 30% just to get bookings in my area which is Port Saint Lucie, Fl. 

If he’s open to it, that could reduce the upfront capital you’d need while making the process a lot smoother.

Here’s a streamlined perspective:Your current approach, putting more down upfront, minimizes risk, increases cash flow faster, and allows you to build equity while reducing overall interest.

One of my early properties barely broke even, but after a couple of years, rent hikes and expense optimization turned it into a strong performer.For cash flow benchmarks, I usually aim for $200-$300 per unit, but your situation.. house hacking.. offers unique benefits like reduced living expenses and quicker equity buildup.

There aren’t many residential development companies operating at this level, which reduces competition and risk.