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Joshua Campbell
  • Athens, AL
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which investment course of action?

Joshua Campbell
  • Athens, AL
Posted Apr 19 2014, 10:30

Long time read, first time post. After reading too many articles on this site, lots of books, and saving money over the past year, and looking at many properties, I am trying to find a first deal to complete but keep running into this scenario:

Property type A: around $40k, needs $5k reno, rent for $650, not a great neighborhood, higher crime, terrible schools, no room for growth, I would be paying cash for this type property

Property type B; around $75k-85k, rent for $1k, great neighborhoods, very good schools, lots of growth in the areas, easy ability to resale and much better appreciation. I would be financing these properties.

My initial goal was to invest in the lower income areas, pay cash, get good cash flow, and repeat the process. After talking with a property manager, I am leaning towards sacrificing cash flow for a better property, easier to manage tenants with more stable incomes, better schools and resale value. However property type B would not meet the 2%, it is pretty difficult even getting a 1.5% rule, but there are other benefits of these properties as well. Any thoughts or advice would be appreciated. Thanks for the information.

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