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investing in low value property
39 posts by 19 users
Larry S.Real Estate InvestorLeesville , SC 
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Does anyone invest in the low valve properties anymore?Looking for the pros & cons.
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Tim W.Real Estate InvestorIndiana 
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Do you mean low valve or low value? I invest in low " price point" properties that have a very high value to me. I'm out the door at about $8-10,000 per house after closing and repairs, get $500-$700 a month in rent and they appraise out at $50,000 per house. The multis are generally about the same per unit except the appraisal generally runs $30,000 per unit. I'm not smart enough to make overpriced property cash flow well. |
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John C.Real Estate Investor
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Tim, Focusing on a repeatable and profitable process. The secret of most business success. Well done. |
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Tim W.Real Estate InvestorIndiana
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Thank you John. It's what my dad's done for 20 years and it's working pretty well for him. |
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Frank A.Loveland, CO 
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Tim is onto the real deal. I used to get accused of " picking nickels out of horse**** while wearing boxing gloves" by some of my " smart" (ie;employed by Fortune 100 employer) friends. I always told them; " I get love at home, I do this for MONEY" . I once met a guy on a SFO-DFW flight who was making his monthly trip to the Dallas area to " manage" his rental properties. It turned out his rental properties were about 4 small strip centers in " not great" parts of town. Each had a package store, check cashing spot, beuaty/nail place etc-you get the idea. Anyway he'd fly down once a month, drive his rental to his bank and get his 9MM out of his safety deposit box, go collect all his rent, ALWAYS ALL PAID IN CASH, OFTEN IN SMALL BILLS. Go to the bank and make his deposit and fly back to San Francisco. He had bought these places in the '80s downturn in TX and was minting money on them. I'm sure most of his neighbors thought he was just an " ordinary businessman" . Schweeeeeet! all cash |
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Tim W.Real Estate InvestorIndiana
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Sounds like my kind of guy. |
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Rick D.Pineville, LA 
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Tim Are you saying you focus on those " bad area" rentals? I have an acquantance that wants to get out of the rental business because he's tired of it. Should I look into this? |
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Tim W.Real Estate InvestorIndiana
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No, it's not bad areas. My areas are actually quite nice and a lot safer than Chicago. It's areas where people are predominantly renters, not owners. I said I like the guy AllCash was talking about for his style. Flying into town, picking up the 9mm in his safe deposit box, then getting his rent cash, then flying back out of town. Has a certain Jason Bourne panache while being a very profitable system...lol. |
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Rick D.Pineville, LA
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I guess I understand what you are saying is you find it easier to cash flow the lower priced prop rather than the higher priced ones. i have found, so far, just reading and learning at this point, is that I would like to focus on those low priced properties at the beginning. I have found the rents in my area cash flow better with the lower priced prop. It seems I can more easily find the properties that are 20 -25k rent for about 500/mo where the prop for 70-80k do not rent for 1400. |
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Tim W.Real Estate InvestorIndiana
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Exactly. |
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Rick D.Pineville, LA
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Thanks Tim! |
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flipper101Real Estate InvestorSan Ramon, California 
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Hi Tim, Exactly where are your properties? I am doing similar in Kansas City Mo and Now getting into IA... Not quite as good as your scenario though. These are averages: 10K purchace-10K rehab = 20k ARV 50K Rent 650 Beats the heak out of what I can do here in CA. |
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Tim W.Real Estate InvestorIndiana
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Flipper,
Tim |
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Grand W.Real Estate InvestorLouisville, KY 
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My opinion is that everybody has to have a place to live, and I'll be happy to take some low hanging fruit that somebody else doesn't want assuming I get good tenants. Yes, that's a big assumption. But from my limited experience, sometimes tenants in " good" parts of town are just as likely as those in not such good parts to tear a house up, not pay rent, etc. So...yes...I like low value properties. |
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Tom C.Real Estate InvestorOH 
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Tim, It's nice to know that I don't have to compete against you in my market. I do the same thing. Numbers from my last project are below. REO purchase price = 16K
Rents = 600 per month. |
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flipper101Real Estate InvestorSan Ramon, California
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Quick question here and I gotta ask owning a construction firm my self. How did a 2 month rehab cost 3K or how did 3K worth of work take 2 months. Only asking because I pay a journeyman just under that in wages for 2 weeks. Yes I am in CA and do high end work, not rehab as a main stay. Some kitchen remodels are 40K.... How much rehab does 3K buy out there? On the Kansas City stuff I am involved with we are averaging 10K for modest rehab. |
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Larry S.Real Estate InvestorLeesville , SC
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Thanks,for the input Guys
I love them,I make me alot of money.
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Tim W.Real Estate InvestorIndiana
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TC,
Good work on your numbers there. That property will work very well. Tim |
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Larry S.Real Estate InvestorLeesville , SC
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I dont do rental property,that is a pain to me.
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Matthew G.Real Estate InvestorBerwyn, Illinois 
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Tim and I use the same system. Albeit, in different areas. But, he is right. Don't overlook these secondary markets. A few years back, a RE mentor told me, " That it is better to make a fast nickel, than a slow dime." My BP and I no longer look or buy the big deals that have marginal cashflow. We get the cheap SFR's and two/three flats that have decent cashflow and we reproduce those deals 2 to 4 times a month. Yes, we have to do some driving and go out of way to get to our target markets, but we have a system in place and professional property management is a Godsend. |
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Posted: 02/19/2008 at 07:33PM
Also, I really don't learn much or do much else beyond this. Don't need to. Don't want to.
