A person approved for an $870k loan asked me if they should buy a 4 unit in DC or if they should look at cheaper markets like Bmore or Philly. They wanted to know if we could realistically expect more appreciation from the DC market after 2019. (A thread...)
Today, I wouldn’t make long term rental acq decisions based on hopes of rapid appreciation. We get caught up hearing stories of folk who bought for $50k in 2009...that’s now worth $. We all want those stories but that may not be realistic over the next 10 years.
I would invest purely based on cashflow returns. If you get appreciation anyway? Great. If not? You’ll still eat. If you’re analyzing a deal in DC that’ll give you a comparable or higher cashflow ROI than in a Philly or Bmore go for it. If not, I’d park my money for cashflow.
Wherever I decide to buy needs to pass my “reasonable person” test. I’m not buying on a block that looks like a scene fresh out of the Wire. I would target areas where I believe a reasonable mother would feel comfortable raising her kids.
Headed into 2020...I’m not betting a mf thing on appreciation. Run me that cashflow.
