P
Prestige Property Advisor
New Member
It is crazy how real estate attracts the con-men :madhot:. Countless times I see properties everyday being marketed as a Cash Flowing Landlord Deals, yet to peal back the information to find these deals are toxic and will actually COST MONEY TO OWN!
I work with hundreds of Foreign Real Estate Investors to find investment properties. I am not a real estate agent but Real Estate Investor myself. I buy and sell hundred of properties each month. I teach two simple rules. Buy at no more than 75% ARV and to multiply your total cash purchase (purchase price plus repairs) by 2% and if that number is not equal too or greater than your month rent you should seek a deal else where. Now the 2% is one that can be "cheated" depending your preference. Typically you can see an cap rate of 12% with that rule.
The reason for the 2% rule is simple; 50% of your gross rent will over time be spent for various things (maintenance and repairs, vacancy, property management, utilities, etc). So if you have a property at $50,000 you need at least $1000/month. You will potentially see a $12,000 a year in gross profit. Now 50% of that will be spent following the rule so you end up with $6000.00. So 6,000/50,000=12% ROI.
To find the rental comps use a site called rentometer or hotpads . To find the value of a house you can use the free sites or a paid AVM.
Hope this helps.
I work with hundreds of Foreign Real Estate Investors to find investment properties. I am not a real estate agent but Real Estate Investor myself. I buy and sell hundred of properties each month. I teach two simple rules. Buy at no more than 75% ARV and to multiply your total cash purchase (purchase price plus repairs) by 2% and if that number is not equal too or greater than your month rent you should seek a deal else where. Now the 2% is one that can be "cheated" depending your preference. Typically you can see an cap rate of 12% with that rule.
The reason for the 2% rule is simple; 50% of your gross rent will over time be spent for various things (maintenance and repairs, vacancy, property management, utilities, etc). So if you have a property at $50,000 you need at least $1000/month. You will potentially see a $12,000 a year in gross profit. Now 50% of that will be spent following the rule so you end up with $6000.00. So 6,000/50,000=12% ROI.
To find the rental comps use a site called rentometer or hotpads . To find the value of a house you can use the free sites or a paid AVM.
Hope this helps.