SDSURFER – SFRs were never meant to be cash flow vehicles and thus rarely cash flow decently. You are competing with 90% owner/users who have bid the price structure up to a zero return.
I would suggest looking into the commercial real estate world as it is designed to cash flow. That is its entire purpose! Here you are competing with 10% owner users so it has not been bid up to a zero return.
We are seeing all cash yields of 6%-10% on day one plus upside. The upside I reference is not from ‘market appreciation’ (i.e. hope it goes up) but rather from increasing the cash flow by filling vacancy, etc.
Thus we’ve done deals where it had a 8% yield on day 1, then within a few months it was delivering a 10% yield.
Before jumping in, expand your horizons into the commercial side. If nothing else, it will be a great education that will serve you well on your residential investments.
