What's the criteria for landlord investors?

Since we are wholesaling take this from the source. I'm not flipping, rehabbing or holding any properties but if I were I would be looking for the same great deals regardless because they are out there. One of our cash buyers has 1 property that has decreased in value since he purchased it last year (he rehabs and holds/rents.)I don't know the numbers on the property but know that he has purchased other properties at awesome prices and is happy the the numbers on those today.

I know some investors who say that they are OK if this happens to them because they will hold these properties for 5, 10 or 15 years and in the long run they will make a lot of money. There are also investors who have lowered the rent on the properties because their tenants have had hours cut or someone in the household has lost a job.

A local investor has a duplex for sale for $20K (if he doesn't sell it he is just fine with keeping it for cashflow.) He bought it a few months back for $15K and put about $2K into cosmetic work on one side. The return on this investment will be fast. In the same neighborhood there is another duplex for sale for $20K (REO.) It has been trashed, broken windows, A/C units gone, interior walls broken for copper and copper under sinks, grass is taller than me, etc. I won't even describe how filthy the place is on the inside. Sure it can be cleaned up but why get into it when another deal in the same area will produce a better and quicker cash flow.

Lea

So far what I have found is that they are looking for cash flow numbers. Thats the been number to look at. You want to figure out the net operating income for the property. and have a little equity but it doesn't have to be as big as with rehabbers and flippers. As far as I know. Also based on what I have been told from some of the coaches. They might go as high as 80% FMV on a property because they are looking to hold and cashflow on it.

Most of my landlords are looking for certain number cash flow in a property. Like for example If I had a single family home. As long as it cash flowed 300 a month they would purchase it. But I do not have this confirmed. This is just going off what they told me.

Just make sure it fits their criteria, what type of property they are looking for, the area, how it looks, and so forth. Also find out if they are trying to rent it out for a time period and then trying to sell it or if they are looking to hold long term. Some properties wont need as much curb appeal. Also there are those who are looking to rent it out as a Lease with option to purchase. There are so many factors honestly you will need to go in depth with your buyers. Ask them because they are the ones buying from you.

When we buy things we only look at a couple things. 1) Will it cash flow 20%for a hold and/or 2)will it flip for at least 25% if we don't hold. For us it is about numbers. Lastly, we have another underlying principal.....we never buy homes in which we would be afraid to go to for rent collection! Seriously. Too many safer neighborhoods to make our money.

I look at the net operating income and its cash flow, as well as the CAP rate. ROI is important as far as what my initial investment would return to me. I also look for up-potential in rents and the location is very important, as it will effect the vacancy rate. Generally, speaking only for myself of course, the most successful rentals are in moderate income areas or near military bases.

Hey everyone,

Thanks for all the feedback! Tammy, how about college-centered areas?

Vincent

landlords like college areas. I am not too keen on them personally because I manage my own properties and there's a high turnover in tenants (not to mention the excesive amount of wear and tear of the college life ). But, they are popular with many landlords.

This is what I want in a rental property. I want a high occupancy rate. I want a low crime area. I want structure to be in good repair. I want to see a 20% ROI calculated using purchase price, prop taxes, insurance and prop management against annual rent. If I can get this, I don't care what the cash to value is. Even if there are unexpected additional expenses, I sould still get better than a 10% ROI.