Selfishly, what I get in return on something I feel aligned with far outweighs anything I can measure in cashflow or margin. 

Hi everyone,I am looking to start purchasing houses to rent in the near future and, currently, I am considering purchasing in Louisville, KY and wanted some feedback on the type of property to invest in.I was wondering what people experiences have been with starting in real estate investing by purchasing cheaper older houses expecting a higher turnover rate vs. spending a bit more and trying to find longer term tenants .I have thought of pros and cons of both but I am considering starting out with cheaper houses and eventually, after having several units, purchasing more expensive units to try to get more long term tenants.cheaper houses higher volume  pros:1) allow me to pay off the property sooner2) allow me to purchase more units faster3) Easier to afford if unit goes un-rentedcons1) higher maintenance costs due to age of house2) higher turnover rate for tenants due to proximity to college campus3) depending on property manager, turnover rate could drive up the cost of managementmore expensive, lower volume pros1) lower maintenance costs2) possibility of lower turnover if long term tenants are found3) nicer houses allowing higher rentcons1) would take longer to save up to purchase2) possibly more straining to pay mortgage if unit goes un-rented3) possibly lower profit margin due to higher mortgage payment I know there are many more pros and cons for both but those are the top 3 of each for me.

I guess it speaks to the over all health of the market when big operators margins slip so low they need to step to this level.  

You get the ARV then subtract repair cost, then profit margin to determine your purchase price.  

We preserve our tight margins by self managing, keeping our vacancy rate to almost 0 and keeping expenses down.  

One challenge that I can't seem to get over is that like Chris, I am a buy and hold investor with limited margins.

The person you  assign to has to get it at a price that works for them so the difference between your buy and sell price is your profit and there is no standard margin and varies from deal to deal but a wholesaler should at least get a profit equal to agents commission or 6% as a minimum in my way of thinking.

Builders when they build try to get 15-17% gross profit margin, but from that profit they pay for overhead (licensing, insurance, phones, office, etc) Plus builders buy materials cheaper and have cheaper labor. 

I would only add, even if you perform your own management, factor in 10%, because you might become disabled someday and have to hire this service.Still, it is marginal, in my opinion. 

In RE basics, this is the economic effects of utility, in economics this is a concept of the marginal propensity of consumption, marginal changes that effect buying or consumption activities.