I live and invest in northern Illinois. My wife and I own 60+ sf rentals here. It’s good to finally hear bigger pockets talk about more than just the west coast markets 🙏
Whenever shows like Bigger Pockets mentions a new area, tons of investors will pour in and create even more competition. I know you already have 60 units, but the more attention, the higher the prices.
Awesome insights! It’s great to see a focus on cash flow in today’s market. Can’t wait to check out those specific markets and the examples you mentioned. Definitely need to brush up on that cash flow formula too! 💰🏡
Guys why don't you use visual material while you talk???? it will be better presentation, show properties, names, maps, peoples, statistics data other graphics etc. we want to see that , no your faces, no ofense, but we are interested in learning....PLEASE SHOW DATA GRAPHICS, PHOTOS, VIDEOS THEN YOU TALK OVER,,,
Thanks for the feedback. This content is actually our podcast, which we air on UA-cam as well. We do release UA-cam-centric videos every Tuesday and Thursday that are more visually-oriented.
I live in PA and the biggest killer to cash flow is the school tax. In Pittsburgh the school tax is more than the property tax and is a hidden expense to outside investors. I think your numbers missed this expense.
I think you'll like it here. Even though the school taxes are high, the quality, at least in our area, seems to be good. We also like the option to use online schooling if the district does something we don't agree with. @@irenmolnar221
We are newbies, looking to purchase our first out of state property. We have been running the numbers in Texas and OKC, taking into account 10% property management, 10% maintenance and capital expenses, 8% vacancy, along with an accurate insurance numbers (close to $1,800 a year in texas for a 3/2!) and property taxes (1.75-2% in texas). Are we missing something? We look at every deal assuming a 6.5% mortgage rate and we can’t find anything that would even be positive cash flow, let alone break even. Is it just not a good time for a newbie to try to break into the market?
2 markets in the US that will cash flow. That's saying something. I'm sure there's a few more but in most places it's dead. The 1% rule is definitely dead. Too many institutional investors are willing to buy properties and not cash flow for the first several years. I'm not doing that! When competing with the institutional investors and flippers, long term investing is dead in any markets I was looking to invest in (I live in Texas and will not invest out of state for a first deal), unless you're very well connected or get extremely lucky and find a great off market deal with lots of value add opportunity. I'm done trying to park my cash in real estate. My realtor kept trying to convince me to buy properties that, according to him, would cash flow immediately. But when I run the numbers using the bigger pockets calculator, I would lose money for the first 5 years. Finding a good mentor also seems to be extremely difficult.
Local investor/agent from Milwaukee here and I don't see the sweet spot between Milwaukee and Chicago. That used the be the Foxconn bubble. Milwaukee or Chicago have better housing stock
Even though I love and personally heavily invested in Pittsburgh, but that example is either in Mt Oliver or Carrick, good luck getting tenant pays you $1700 in that area, just zillow search in 170-180k price range for 4bd 2bath and those are the 2 properties shows up in that 2 neighborhoods Pittsburgh is rather difficult city for non-local investor to invest because it has so many misleading zip code and neighborhood It common to see top neighborhood right next to bottom neighborhood without any distinction unless you know the city Few examples are Point Breeze and Homewood, hill district and Oakland or strip, central Northside and Marshall shadeland, list goes on Not to mention Barbara Cohen already mentioned it in 2023, let’s keep it down for bit
Absolute gold when Dave and co discuss specific markets and the how to as opposed to feel good stories. Excellent episode! Also want to apologize to Dave- I was wrong, you are an excellent host on the main show if you keep talking specific case studies! 🙌
Thanks for the feedback! Appreciate your open-mindedness in listening to the new show! Glad you're liking these types of episodes -- we'll make sure to do more.
11:26 a 5 or 6 percent cash on cash return is not better than what you can get anywhere else. Let's take a look at one of the most basic investments that almost everyone here likely holds: the S&P 500. Over the past year it's increased 33.12 percent! And yes, the stock market has its ups and downs, as does real estate. What about 2022 you say? Well let's zoom out and look at the last 5 years. Even with the 25 percent correction that happened in 2022, it's still up 93.74 percent over the past five years. That's nearly doubling your money in five years! 5 or 6 percent return requiring a lot of work vs 15 percent annualized returns with no work at all... ⚖️🤷🏻♂️ My dream was always to be a real estate investor, and still is. But the pandemic ruined that for a lot of us. And let's be real, a 5 to 6 percent return is not better than anything else, and is hard to even achieve right now in real estate. There are better places to park your cash right now.
@@politico1856 good point! Leverage is a powerful tool in real estate, assuming you have a loan on the property and didn't pay cash, of course. Leverage can also be used in stocks, but it comes with a lot of added risk. That being said, home prices aren't rising like they were and probably will remain stagnant for a while, if not decrease a bit. Also, if I remember correctly, the example in this video included a mortgage and still was only a 5-6% CoC return. Any appreciation you may see is just icing on the cake, but not guaranteed. I love real estate but I just can't see it beating the stock market over the next decade. It might make sense for someone with other assets who needs to take advantage of some tax strategies to reduce their tax burden, but for the average individual, building a stock portfolio makes more sense right now, in my opinion. For me personally, 5 or 6 percent is not worth the risk, time, and stress that comes with buying and managing an investment property. Those returns can easily be found risk free and with no work involved.
@@politico1856 good point! Leverage is a powerful tool in real estate, assuming you have a loan on the property and didn't pay cash, of course. Leverage can also be used in stocks, but it comes with a lot of added risk. That being said, home prices aren't rising like they were and probably will remain stagnant for a while, if not decrease a bit. Also, if I remember correctly, the example in this video included a mortgage and still was only a 5-6% CoC return. Any appreciation you may see is just icing on the cake, but not guaranteed. I love real estate but I just can't see it beating the stock market over the next decade. It might make sense for someone with other assets who needs to take advantage of some tax strategies to reduce their tax burden, but for the average individual, building a stock portfolio makes more sense right now, in my opinion. For me personally, 5 or 6 percent is not worth the risk, time, and stress that comes with buying and managing an investment property. Those returns can easily be found risk free and with no work involved.
Not everyone lucky I know somebody who rented and the tenant didn't pay for 3 years anything and totally destroyed the property 100k damage???? So is not easy business
I live and invest in northern Illinois. My wife and I own 60+ sf rentals here. It’s good to finally hear bigger pockets talk about more than just the west coast markets 🙏
Whenever shows like Bigger Pockets mentions a new area, tons of investors will pour in and create even more competition. I know you already have 60 units, but the more attention, the higher the prices.
Hi we are moving from California maybe there is better!!!
I recently bought a triplex in lackawanna ny for 92.5k. Put 30k into it. Renting it for $3200
Crazy good numbers.
I don't believe you
I have same numbers but hood properties require more hustle for sure
@@brookeh2017 I’m jealous
hi where is that place???? we are moving from California!!!!
Awesome insights! It’s great to see a focus on cash flow in today’s market. Can’t wait to check out those specific markets and the examples you mentioned. Definitely need to brush up on that cash flow formula too! 💰🏡
Would you be able to analyze South Texas, Rio Grande Valley? I would like to know your opinion regarding the area.
Guys why don't you use visual material while you talk???? it will be better presentation, show properties, names, maps, peoples, statistics data other graphics etc. we want to see that , no your faces, no ofense, but we are interested in learning....PLEASE SHOW DATA GRAPHICS, PHOTOS, VIDEOS THEN YOU TALK OVER,,,
💯
Thanks for the feedback. This content is actually our podcast, which we air on UA-cam as well. We do release UA-cam-centric videos every Tuesday and Thursday that are more visually-oriented.
I live in PA and the biggest killer to cash flow is the school tax. In Pittsburgh the school tax is more than the property tax and is a hidden expense to outside investors. I think your numbers missed this expense.
Hi we are moving from California got so bad here under democrats very unaffordable full with homeless and crime!!!1
I think you'll like it here. Even though the school taxes are high, the quality, at least in our area, seems to be good. We also like the option to use online schooling if the district does something we don't agree with. @@irenmolnar221
Insurance tried to get me from 125 to 200, so I switched and now I'm paying 130. Suck it farmers
Numbers definitely have to be tighter. In addition to the factors you mention, buyers are more fickle now and inventory is slightly up
Are sf markets’ analysis also viable for multifamily?
We are newbies, looking to purchase our first out of state property. We have been running the numbers in Texas and OKC, taking into account 10% property management, 10% maintenance and capital expenses, 8% vacancy, along with an accurate insurance numbers (close to $1,800 a year in texas for a 3/2!) and property taxes (1.75-2% in texas). Are we missing something? We look at every deal assuming a 6.5% mortgage rate and we can’t find anything that would even be positive cash flow, let alone break even. Is it just not a good time for a newbie to try to break into the market?
2 markets in the US that will cash flow. That's saying something. I'm sure there's a few more but in most places it's dead.
The 1% rule is definitely dead.
Too many institutional investors are willing to buy properties and not cash flow for the first several years. I'm not doing that! When competing with the institutional investors and flippers, long term investing is dead in any markets I was looking to invest in (I live in Texas and will not invest out of state for a first deal), unless you're very well connected or get extremely lucky and find a great off market deal with lots of value add opportunity. I'm done trying to park my cash in real estate. My realtor kept trying to convince me to buy properties that, according to him, would cash flow immediately. But when I run the numbers using the bigger pockets calculator, I would lose money for the first 5 years.
Finding a good mentor also seems to be extremely difficult.
How is 5% CoC good return? If it was cap rate that would be one thing but I do not see how that is good for a CoC.
What is the link to your UA-cam where you are talking about your portfolio
Coming out on Tuesday!
In dc there’s a bunch of property that will easily cash flow but buying them are so hard because even 3.5% of a million is a lot of money
Local investor/agent from Milwaukee here and I don't see the sweet spot between Milwaukee and Chicago. That used the be the Foxconn bubble. Milwaukee or Chicago have better housing stock
What does 5% cash on cash mean?
Hi we lose money here in California mortgage, insurance went up 100%, maintenance, taxes so by the end we loose because of the high prices!!!!!
Do you have to pay your property manager first month's rent when they put a new tenant in your rental?
It depends on the PM, but generally yes.
Even though I love and personally heavily invested in Pittsburgh, but that example is either in Mt Oliver or Carrick, good luck getting tenant pays you $1700 in that area, just zillow search in 170-180k price range for 4bd 2bath and those are the 2 properties shows up in that 2 neighborhoods
Pittsburgh is rather difficult city for non-local investor to invest because it has so many misleading zip code and neighborhood
It common to see top neighborhood right next to bottom neighborhood without any distinction unless you know the city
Few examples are Point Breeze and Homewood, hill district and Oakland or strip, central Northside and Marshall shadeland, list goes on
Not to mention Barbara Cohen already mentioned it in 2023, let’s keep it down for bit
I can’t understand how this channel can keep talking about real estate
Absolute gold when Dave and co discuss specific markets and the how to as opposed to feel good stories. Excellent episode!
Also want to apologize to Dave- I was wrong, you are an excellent host on the main show if you keep talking specific case studies! 🙌
Thanks for the feedback! Appreciate your open-mindedness in listening to the new show! Glad you're liking these types of episodes -- we'll make sure to do more.
What if these places are in war zones and D class places? Are you saying to still go and invest?
How does any deal cash flow with using 10% PM fee, 8% maintenance, 8% capex and 8% vacancy lol thats 34%
Personally. I do the "work" myself
If debt is low with 4% interest rates from govt.
11:26 a 5 or 6 percent cash on cash return is not better than what you can get anywhere else.
Let's take a look at one of the most basic investments that almost everyone here likely holds: the S&P 500. Over the past year it's increased 33.12 percent! And yes, the stock market has its ups and downs, as does real estate. What about 2022 you say? Well let's zoom out and look at the last 5 years. Even with the 25 percent correction that happened in 2022, it's still up 93.74 percent over the past five years. That's nearly doubling your money in five years!
5 or 6 percent return requiring a lot of work vs 15 percent annualized returns with no work at all... ⚖️🤷🏻♂️
My dream was always to be a real estate investor, and still is. But the pandemic ruined that for a lot of us. And let's be real, a 5 to 6 percent return is not better than anything else, and is hard to even achieve right now in real estate. There are better places to park your cash right now.
I agree, and you don't have to think about it. Put it in the S&P 500 and watch it grow.
Even 3% savings account is better than 5-6% cash on cash in RE, its ridiculous
How about leveraged? RE has leverage
@@politico1856 good point! Leverage is a powerful tool in real estate, assuming you have a loan on the property and didn't pay cash, of course. Leverage can also be used in stocks, but it comes with a lot of added risk. That being said, home prices aren't rising like they were and probably will remain stagnant for a while, if not decrease a bit. Also, if I remember correctly, the example in this video included a mortgage and still was only a 5-6% CoC return. Any appreciation you may see is just icing on the cake, but not guaranteed.
I love real estate but I just can't see it beating the stock market over the next decade. It might make sense for someone with other assets who needs to take advantage of some tax strategies to reduce their tax burden, but for the average individual, building a stock portfolio makes more sense right now, in my opinion. For me personally, 5 or 6 percent is not worth the risk, time, and stress that comes with buying and managing an investment property. Those returns can easily be found risk free and with no work involved.
@@politico1856 good point! Leverage is a powerful tool in real estate, assuming you have a loan on the property and didn't pay cash, of course. Leverage can also be used in stocks, but it comes with a lot of added risk. That being said, home prices aren't rising like they were and probably will remain stagnant for a while, if not decrease a bit. Also, if I remember correctly, the example in this video included a mortgage and still was only a 5-6% CoC return. Any appreciation you may see is just icing on the cake, but not guaranteed.
I love real estate but I just can't see it beating the stock market over the next decade. It might make sense for someone with other assets who needs to take advantage of some tax strategies to reduce their tax burden, but for the average individual, building a stock portfolio makes more sense right now, in my opinion. For me personally, 5 or 6 percent is not worth the risk, time, and stress that comes with buying and managing an investment property. Those returns can easily be found risk free and with no work involved.
Not everyone lucky I know somebody who rented and the tenant didn't pay for 3 years anything and totally destroyed the property 100k damage???? So is not easy business
Please use better lighting 😢
It's good, Miss, you need better laptop
it's not a makeup channel, pay attention to the information
Okay and how about the OKC metro??
I’ve been buying in Lawton. Okc is next
@@DexterBoyz1984isn't the insurance in okc a problem for cash flow
@@joshuakrilov4042I’m calling my insurance agent on Monday to keep them honest . I’ve been lucky so far