properties not satisfying 10% rule in my area

[RahulDhond]

Most of the properties here in my area(Mississauga, Brampton) dont satisfy the 10% rule(1st step of the funnel). How are you guys dealing with it? What is the maximum % that we can stretch as investors?
As a realtor in making(taking Ph.3 exam soon), I am trying to choose a farm area for business that would more or less fit my investment criteria too. That way, I could list houses in my course of business and if an occasional property fits my criteria, I could buy it for my portfolio.
Any thoughts?
thanks,
- RD

 

[GarthChapman]

This is only the first filter in your process, and with the runup in real estate values and rents over the past 2 years has been revised to 8-10%. It is now referred to as the Cash Flow Zone. Here is a good post on the subject for you:



http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-3500-The_10_rule.html



Hope that helps,

 

[RahulDhond]

QUOTE (GarthChapman @ Aug 3 2008, 03:24 PM)
This is only the first filter in your process, and with the runup in real estate values and rents over the past 2 years has been revised to 8-10%. It is now referred to as the Cash Flow Zone. Here is a good post on the subject for you:



http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-3500-The_10_rule.html



Hope that helps,






It is a REIN only link and hence I cannot access it. Well, hopefully I'll join in a few months' time and will be able to access it.

Garth, thanks anyways.

- RD

 

[Nir]

RD,
There are many properties within 1-1.5 hours drive from you that meet not only the 10% rule but actually generate closer to 15% annual rent to purchase price ratio!

I strongly recommend that you not compromise and purchase ONLY such properties even if it takes you a little more time to find them.

What`s another month or two of searching for a (great) property compared to the nice positive cash flow it will generate for you every month for years to come?

Good luck,
Neil

 

[GarthChapman]

Neil is right. Make sure you set your expectations out clearly, and then don`t settle for less.

Think of it a bit like marriage - if you make the right choice you won`t have to undo it and start all over again...

 

[RahulDhond]

I agree. My thinking was that since I would be listing and selling houses as a realtor in and around Mississauga, Brampton anyways, I could try to pick up investment properties right here in my operating areas; sort of 2 birds with 1 stone.
But I see your point.
thanks,
- RD