I just bought a great, all updated , solid, income property in a B+ neighborhood. I paid $200K but it came w/ a tenant for $1400/month. I did the deal because it’s a place I’d live myself and /or also I could literally flip it immediately for $245+ but I want to hold long term. I don’t see how the 1% can work in this area. A starter house in good neighborhoods and with work still needed starts at $260-$300K.
1% rule doesn't usually work for single family houses in B+ neighborhoods. It's a different strategy. You're profit plan is the equity you built buying below value, the appreciation of the price over time, and the pay down of the loan. If a property doesn't meet the 1% rule, it just shows you cash flow won't be strong (at least at first) so you have to make your money another way.
I’m new to this game and learning the rules. Putting the 1% rule to practice here in Western Australia unfortunately doesn’t work. Or at least I can’t seem to find any. It seems everyone is betting on capital growth. There is always a demand for more housing here. Wether it is tightly regulated to maintain higher property prices or not I don’t know yet. I wish it did work here.
Thanks for the feedback. I've heard that about Australia. It's just a different game. You may have to put more money down or partner with others to make cash flow work. In that type market you have to focus a lot ok growth fundamentals. Make sure demand will be super strong for future and buy in areas where it's difficult to create new housing (decreases supply).
What's a few good ways to protect yourself from falling home values that eventually turn into falling rents ?. I'm just worried about the cash flow if or when the market corrects itself.
The best protection is a quality location with strong population and economic growth. Even with a bad economy, that type of location will do the best and have prices and rents that fall the least or not at all. Rents are closely tied to job salaries. If salaries were to fall or if we had massive unemployment, then rents could fall. This happened in the Great Depression. But during the 2008-2009, rents only softened and then went up.
@@CoachChadCarson Thanks for the info . Almost nobody covers this matter, which I find odd since it could really do some damage to a portfolio. I was unfortunately in this position myself during the last housing crash. Big rental companies were offering free months rent , 200 off rent specials etc... BTW I live in between Chicago and Milwaukee. A few million people within a hours drive
I thought the same thing for months but a real estate agent told me rent is supply demand not home price based. We ran out of homes in 2018 and rent will just continue to go up. Location is key too look at if the city and county are growing and if local towns have plans to expand roads etc.
how do i figure a 15% net profit from final sale on property as a beginning flipper? Or figure out 55% after value? what formula should i use. thank you Coach
Yeah, i had a property manager that didn't seem to realize that. Every time a tenant left they made it sound like it was a requirement to replace all the carpets because of a couple small stains, and paint entire interior, about every 2 years.
Thank you. Your videos really help me in my real estate journey. You're rock 🎉
I just bought a great, all updated , solid, income property in a B+ neighborhood. I paid $200K but it came w/ a tenant for $1400/month. I did the deal because it’s a place I’d live myself and /or also I could literally flip it immediately for $245+ but I want to hold long term. I don’t see how the 1% can work in this area. A starter house in good neighborhoods and with work still needed starts at $260-$300K.
1% rule doesn't usually work for single family houses in B+ neighborhoods. It's a different strategy. You're profit plan is the equity you built buying below value, the appreciation of the price over time, and the pay down of the loan. If a property doesn't meet the 1% rule, it just shows you cash flow won't be strong (at least at first) so you have to make your money another way.
@@CoachChadCarson That really makes me feel better, thank you so much!
Thanks for sharing the clear analysis.
I’m new to this game and learning the rules. Putting the 1% rule to practice here in Western Australia unfortunately doesn’t work. Or at least I can’t seem to find any. It seems everyone is betting on capital growth. There is always a demand for more housing here. Wether it is tightly regulated to maintain higher property prices or not I don’t know yet.
I wish it did work here.
Thanks for the feedback. I've heard that about Australia. It's just a different game. You may have to put more money down or partner with others to make cash flow work. In that type market you have to focus a lot ok growth fundamentals. Make sure demand will be super strong for future and buy in areas where it's difficult to create new housing (decreases supply).
You have helped alot you deserve the best credit.
God bless you
Great video, very informative, thanks!
You're welcome! Thank you for watching. And hello to a fellow South Carolinian!
Beautiful, thank you.
Guay! Informativo y muy práctico. Gracias, Coach!
Gracias a usted!
You are my idol 👏🏻👏🏻
What's a few good ways to protect yourself from falling home values that eventually turn into falling rents ?. I'm just worried about the cash flow if or when the market corrects itself.
The best protection is a quality location with strong population and economic growth. Even with a bad economy, that type of location will do the best and have prices and rents that fall the least or not at all.
Rents are closely tied to job salaries. If salaries were to fall or if we had massive unemployment, then rents could fall. This happened in the Great Depression. But during the 2008-2009, rents only softened and then went up.
@@CoachChadCarson Thanks for the info . Almost nobody covers this matter, which I find odd since it could really do some damage to a portfolio. I was unfortunately in this position myself during the last housing crash. Big rental companies were offering free months rent , 200 off rent specials etc... BTW I live in between Chicago and Milwaukee. A few million people within a hours drive
I thought the same thing for months but a real estate agent told me rent is supply demand not home price based. We ran out of homes in 2018 and rent will just continue to go up. Location is key too look at if the city and county are growing and if local towns have plans to expand roads etc.
Great video!
Thanks for watching Chris!
Thanks Coach hows France?
Actually in Spain but it's going great! Thanks for asking and for watching the video.
how do i figure a 15% net profit from final sale on property as a beginning flipper? Or figure out 55% after value? what formula should i use. thank you Coach
that 1% goes out the window when you are required to rebuild half of the rental everytime some "renter"moved out ( finally).
Yeah, i had a property manager that didn't seem to realize that. Every time a tenant left they made it sound like it was a requirement to replace all the carpets because of a couple small stains, and paint entire interior, about every 2 years.
Maybe learn..and screen tenants better..after the first bad tenant you WILL learn how to screen for losers
Great Video Coach!!!