You also have to remember, as an investor you make money when you purchase your property, not when you sell it.
Now, there are 2 types of investments, you have CASHFLOWING investments and then you have APPRECIATING investments.
let’s use my market, South FL for an example:
Say I buy a SFH (since they have the best appreciation) for $200K that needs about $30K in rehab…total cost $230K…Now say FMV is $350K, then I bought the home with 65% equity. Now to breakeven on $230K mortage in FL, you will need to rent that property out for close to $2000 a month which is highly unlikely since this is a low priced home in a typcial working neighborhood. You may only get $1000-1200 month rent. So negative cashflow will be about $1000 a month lets say.
Now after 12months of renting the property I sell it, using only 10% appreciation i sell it for $385K representing a $155K profit on the sale minus $12000 negative cashflow, I now made $143K profit total in 12months. Even if the home did not appreciate, I still would of made $118K profit. This is an appreciating investment. Plus since the home is rehabbed, i am selling it at FMV to an end user, not flipping to another investor… This is typical of many big city markets. It is almost impossible to cashflow in SFL, NY, Boston, CAlf, ect.
Now goto Pittsburgh…You can buy a duplex for $15000, and rent it on sec8 for $900 a month, obiviously you will have decent cashflow but the home will never appreciate. It will always be worth $15,000. The market appreciates about 1% a yr if your lucky in those cheap purchase areas with cashflow rentals…
Investors have to realize there market and see what can be done, some markets just do not have cashflow but have strong appreciation. This is one reason why people love lease options, Give you the chance to charge the T/B more rent since they will have ownership in the property.