Each 2/1 unit is 560 / month. I think it is possible numbers for that area. Maybe they are overstating with 100% occupancy. Expense seems like in the ballpark figure with 50% rule? Maybe deferred maint?
What would you pick between say B+ area in Mid-west city (with 10 cap) vs C area in say Sacramento (with 7 cap)?
I feel you might get more pain in managing C area in Sacramento than owning that B+ area in mid-west. I am debating since I don’t really feel those B+ area will become less desirable even if economy is slowing down. Yea, Detroit was one example out of so many cities there. On top of that you got buffer of 3% CAP rate to come down to par with 7% in Sac or LA area.
The Midwest and the east coast are hopeless, why bother…I had a friend move from Cleveland to Oakland…Oakland compared to Cleveland was paradise…Florida and Texas have some hope…but they have low barriers to entry and high maintenance costs due to god awful weather… Better to build take profit and run…
I have never dealt with C area, and don’t have the stomach for it. Some folks here land lording in rougher areas of Oakland seem to enjoy it so far. B area in Midwest is fine, except the Midwest part. It’s the reverse of “rising tide lifts all boats”. I think I’d be swimming against current in Midwest.
I’d limit myself to these 10 areas. West coast is already too expensive for cashflow, and I am looking to add some cashflow, so no go there. If you like Cincinnati, why not take a look at Nashville and Charlotte? I am learning about Tampa now.