Hello Everyone,
Found this today actually. Would love some feedback.
2bed/1bath house in Dallas appraised for $52k. Recently rented for $700; insurance $420/yr; tax $816/yr.
Asking price $39,900. How does this sound?
It would be a very good deal at $35K.
Mike
Hey property manager, how did you arrive at 35k being a good offer? just wondering.
The 2% rule for rental properties. $35,000 x 2% = $700 a month
Therefor a 50,000 house would have to rent for 1,000 per month?
I understand.
But properties that rent for 2% of the purchase price must be hard to find.
Hey Mike,
You think this is a good first investment or should i look for bigger things?
If you could get this for $35,000, I think it would be an excellent first rental!!!
Mike
i’ve actually been offered to take over their entire portfolio which consists of three other houses at:
$33,420 for $550
$36,235 for $675
$35,000 for $800.
Collectively they are being offered for $140k for all four houses. Is this a worthy deal or should I just stick with one?
I’d do all four if you could get them for the right price (and assuming no repairs are needed):
$27,500 for $550
$33,750 for $675
$35,000 for $800 is good!
Of course, you need to check leases, determine repairs needed, understand the market and the neighborhood, (all the due diligence), etc.
Good Luck,
Mike
Are you guys finding it easier to find properties that the 2% rule applies to? With the market the way it is I would imagine there is a TON of stuff out there that works for rentals.
Are you guys finding it easier to find properties that the 2% rule applies to? With the market the way it is I would imagine there is a TON of stuff out there that works for rentals.
Yes, however with the market in such a bad state, I have gotten very cautious and am only buying properties for 50% or less of market value instead of 70% in the past.
Mike
Also something to consider when the inventory rises such as in Miami with all those condos you end up with so much supply that rental rates get cut throat, rates fall, and vacancies soar as people have many more choices than in the past. Simple supply and demand. Think about it, you have a condo you can’t sell and you have 2 mortgage payments, wouldn’t you rather get $500 a month than pay the whole mortgage payment out of pocket? Negative cashflow is always better than no cashflow. Miami is an extreme example but be wary of such a trend in your area. Of course on the flip side every time a home (SFH or MFH) gets taken back by the bank its effectively removed from the available rent inventory so that decreases rental supply. Regular sellers stuck with 2 homes will rent out the second home, banks usually won’t. One increases supply, one doesn’t. You need to be intimately aware of what is going on in your market.
so how’s the state of the texas market? i know there are multiple duplexes and sfh being developed. and since it’s considered a hot market is there a chance the market will be overflooded with rentals and rental properties won’t be considered good investments?