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Why You Should Only Invest in $50,000 Properties or Less

Expertise: Real Estate Investing Basics, Personal Development, Landlording & Rental Properties, Real Estate News & Commentary, Business Management, Flipping Houses, Real Estate Deal Analysis & Advice, Personal Finance, Real Estate Marketing
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sheriff-sale

I know that this is going to be a very touchy subject for a lot of investors out there who have, unfortunately, lost a lot of money to shady turnkey operators. But I also know it will be considered sage advice by investors like myself who have made a ton of money in this specific asset class.

I truly believe you should only invest in properties that are $50,000 or less. Here’s why.

No, it’s not the war zone and it’s not the ghetto—like a lot of you probably think.

I’m sure that a lot of Midwest folks can vouch for me. I used to get laughed out of every room when I set up shop here in Toledo, Ohio. Now, it looks like investors are coming to Toledo because there aren’t any deals on the East Coast and West Coast anymore.

That’s a separate topic, but I do think there are many reasons why you should focus on properties under $50,000. I’m just going to focus on two today. I’ll keep it very simple, short, sharp, and sweet.

Reasons to Invest in Real Estate that Costs $50K or Less

1. Less Risk

The first reason is this: the less money that you invest, the less you are risking. Something that I tell everyone that reaches out to me and says, “Where should I flip? What should I buy? How much should I spend?” I always tell them to spend the least amount of money possible.

Why? Because the likelihood of you losing money on your first couple deals is pretty high.

I didn’t make any money on my first five deals. I only started making money later. I call it my Harvard degree, on which I’ve earned from making real estate mistakes. But I’ve learned from them, and of course, I’ve gotten better.

So find yourself a market, find yourself a lower socioeconomic area, find a property that you can negotiate well, and buy something cheap that just needs a cosmetic rehab. Do your best to sell it for a profit, and if you don’t, do not get down on yourself.

Stick with it! I’m sure over time you will start doing well.

So again, the less money that you invest, the less you are risking. Of course, do your due diligence, become a market expert, and network with as many people as possible in that particular area.

And don’t invest until you really have the right infrastructure set up from a team standpoint. You have to have boots on the ground and people who will have your best interest at heart.

Related: Cheap Properties with High Returns or Nice Properties with Low Returns?

realtor giving house keys to homeowners

2. No Competition

The second reason is there is such a large stigma surrounding these properties, there is absolutely no competition. In 2012, I moved to the U.S., and I’ve been here in Ohio since 2013. I’ve literally felt like a kid in a candy store for six years—there’s no competition.

I buy what I want, when I want, and I pay whatever I want for it, because nobody is buying here. Markets like Toledo, Dayton, Cincinnati, Indianapolis, Ft. Wayne, Detroit, Lansing, and even Kansas City are similar. Some of them have more of a ring about them though. There’s more hype and buzz around cities like Kansas City, Cincinnati, Cleveland, and Detroit now. But there are a lot of other tertiary markets like Toledo and Ft. Wayne that are smaller.

You would be surprised at some of the stuff we have here, and you would also be surprised at the types of assets that you can buy for $20,000 to $50,000. I guarantee you these are B-class assets.

I live in these areas. There are blue collar, working-class people in these areas, as well as white collar, working-class people in these areas. Prices are affordable and they do well in their jobs. They pay rent, buy homes, there’s no riffraff on the streets, no boarded up homes, no vacant homes—or very few—you can’t even spot them.

Guys, there is a huge stigma surrounding these homes for no reason. All of the guys on the East Coast and West Coast, buy yourself a ticket on Frontier or Spirit and get your butt here. Check it out for yourself!

Trust me, you will be very surprised by what kind of asset and the area you can buy in for $50,000 or less. I’m sure a lot of Midwest folks are going to leave comments saying the same thing.

Conclusion

So that’s it. To summarize, the two key reasons why you should invest in $50,000 properties or less is because the less money you invest, the less risk you’re taking on. The second thing is there is a lot of unnecessary stigma surrounding properties at this price, but there is absolutely no competition.

hard-money-lenders

Where are you investing? How much are the properties you’re buying? Is it working out for you?

Comment below. 

 

Engelo Rumora, a.k.a.”the Real Estate Dingo,” quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate all over the world and has bought, renovated, and sold over 500 properties. He runs runs Ohio Cashflow, a turnkey real estate investment company in the country (Inc 5000 2017 & 2018) and is currently in the process of launching a real estate brokerage called List’n Sell Realty. He is also known for giving houses away to people in need and his crazy videos on YouTube. His mission in life is to be remembered as someone that gave it his all and gave it all away.

    James Free Rental Property Investor from Fort Collins, CO
    Replied 3 months ago
    This article inspires a conversation on risk vs odds vs upside. Putting $1 in a slot machine has low risk and bad odds, but high percentage upside. Putting it in an Ally savings account has low risk, great odds, and terrible upside. Putting your life savings in Facebook stock has high risk, modest odds, and modest upside. This article is correct in saying that you have less to lose per transaction buying lower-priced houses, but the markets are generally not as safe/stable as higher-cost markets. It’s a tradeoff.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks for your comment James. I don’t agree that they are more risky just because they are cheaper. As I mentioned in the video. $30,000, $40,000 or $50,000 buys decent real estate in many tertiary markets. Just my opinion. Thanks again and much success
    Troy Bailey from clayton, NC
    Replied 3 months ago
    I kept hearing people say banks don’t finance homes under 50k and I believed it until I tried to find a loan under 50k and did. I’m under contract for two homes currently both are financed at 44k. I reached out to a few small banks but ended up using my realtors in-house broker for the deal since he had the best quote. You have to pay points and 15% down is not an option but I was able to get away with 20%. One of the lenders told me they go as low as 30k on a loan.
    Keela Bee from Arlington, Texas
    Replied 3 months ago
    Wells Fargo will offer mortgages for as little as $25k.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Troy, There are many lenders that will lend as low as $10,000. There are also many portfolio lenders offering creative funding options. Our investors always just buy with cash due to the low price points so we don’t really deal with financial institutions. Much success
    Sid Montero
    Replied 3 months ago
    What’s the name of those lenders?
    Sid Montero
    Replied 3 months ago
    What’s the name of those lenders?
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Check out Jerry Padilla. Thanks
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Troy, There are many lenders that will lend as low as $10,000. There are also many portfolio lenders offering creative funding options. Our investors always just buy with cash due to the low price points so we don’t really deal with financial institutions. Much success
    Vaughn K. from Seattle, WA
    Replied 3 months ago
    Actually, these types of markets are MORE STABLE than coastal markets. Look up the run ups and busts that have happened in SF, NYC, LA, etc over the last couple decades… Now look at boring midwest or southern cities. The midwest just chugs along slightly above inflation on average, but providing strong cash flow the whole time, and with far smaller busts. If you buy in a city that is at least slowly growing, it is a far more stable and sound investment than buying in trendy markets… Especially right now since all the fundamentals show those areas are in bubble territory.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Vaughn, We haven’t even seen a true recovery in many Midwestern cities so another market “kick” won’t do any damage in my opinion. You are right, it’s slow growth and just tends to keep up with inflation. Slow and steady wins the race I guess? lol Thanks again
    Mike McKinzie Investor from Westminster, CO
    Replied 3 months ago
    Engelo I would tend to agree with you for “newbie” real estate investors. I would by hypocritcal if I didn’t, my first rental cost me $30,000.00 and rented for $500 a month (but that was around 1982). On the other hand, I would disagree with that with this caveat, it matters how much RENT you receive. A $50,000 house that rents for $300 a month is very different than a $50,000 house that rents for $750 a month. At today’s prices, I wouldn’t invest in anything that rents for less than $1,000 a month. The ‘costs’ of owning a rental is pretty “FIXED”, no matter how much rent you collect. Management, Property Taxes, Insurance, repairs, Capital Expenses, Vacancies, etc… has proven to be 50% of the MARKET RENT, over time, for ALL Rentals. The Median rent being around $1,000. As the rents go lower, that 50% increases to 55% or even 60%. Vice versa, as the rents rise, that 50% drops to 45%, 40% or even less. My current rents range from a low of $504/month (Fresno, CA) to $1,800 a month (Dallas/FW metro area). I know what my expenses are as I have been doing this for over 40 years. For example, I have a nice rental in OK, it was running at a 20-25% expense rate for 5 years. Last year, a turnover cost me over 200% expense rate, that’s right, the turnover cost me 2 years of profits. The lesson here is to NOT look just at the PRICE, but ALL ASPECTS of a property. A $50,000 house with a 10 year old roof is quite different than one with a 40 year old roof, even if the rent is the same. That house I bought for $30,000, I sold one year later for $50,000, and moved on. Therefore, just be careful, that $50,000 house might sell for $40,000 in five years, or it may sell for $75,000 next year. As we say on BP, do your RESEARCH!
    Grant Bennett Wholesaler from Tulsa, Oklahoma
    Replied 3 months ago
    Mike, I’d be interested in knowing more about the OK property you mentioned, with 200% expense rate in one year. As someone who is starting a small portfolio in OK, my hopes were that by using the most durable materials (LVP floors, no carpet, metal roofs) on rentals, I’d be able to avoid situations like that. Was your unit vandalized? What caused the 200% expense rate, and could anything have prevented it in hindsight? Totally agree that the amount of rent you receive as a % of asset value should be favorable to you or the deal simply doesn’t make sense.
    Mike McKinzie Investor from Westminster, CO
    Replied 3 months ago
    Its quite simple, in round numbers, the rent is $1,300 and the PITI is $800. My turnover repair cost was $17,170.00. I did have to remove a back wooden deck that was completly rotted through, and replace it with landscaping. Trash hauling was $2,000.00, (included the wood deck). Carpet, paint, damage to the drywall, replacing the entire kitchen and bathroom cabinetry, etc…. Broken toilets, new HVAC system, it adds up quick!!! It was truly a “FLIP” but on the rental side!!! Reply Report comment
    Mike McKinzie Investor from Westminster, CO
    Replied 3 months ago
    Its quite simple, in round numbers, the rent is $1,300 and the PITI is $800. My turnover repair cost was $17,170.00. I did have to remove a back wooden deck that was completly rotted through, and replace it with landscaping. Trash hauling was $2,000.00, (included the wood deck). Carpet, paint, damage to the drywall, replacing the entire kitchen and bathroom cabinetry, etc…. Broken toilets, new HVAC system, it adds up quick!!! It was truly a “FLIP” but on the rental side!!! Reply Report comment
    Mike McKinzie Investor from Westminster, CO
    Replied 3 months ago
    Its quite simple, in round numbers, the rent is $1,300 and the PITI is $800. My turnover repair cost was $17,170.00. I did have to remove a back wooden deck that was completly rotted through, and replace it with landscaping. Trash hauling was $2,000.00, (included the wood deck). Carpet, paint, damage to the drywall, replacing the entire kitchen and bathroom cabinetry, etc…. Broken toilets, new HVAC system, it adds up quick!!! It was truly a “FLIP” but on the rental side!!!
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    $17,000+ for a turn is huge. Out of the 300 units that we manage I think the highest turn any one of our investors has ever had was around $5,000 or so. Thanks
    Jeremy Lublin Investor from Lakewood, Ohio
    Replied 3 months ago
    You’re intermingling capital improvements and turnover maintenance costs. These tenants may have caused some damage beyond normal wear but replacing a rotten deck or HVAC system should have been done even if the tenants were not moving out. Replacing a kitchen sounds like a way to increase your advertised rent to align with current market rates.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks for your comment Mike, Keep in mind also that in some tertiary markets like Toledo the CapEx and maintenance are lower due to the cost of labor. So even if the rent is $1,000 or less it doesn’t necessarily mean that the cost is fixed to 55%-60%, etc… Same thing goes for a property turn. Thanks again and I’ll catch you at my next blog 🙂
    Bo Wagner Attorney from Brookhaven, GA
    Replied 3 months ago
    I have several investors that I work with in the ATL area (some who invest in different parts of the state of GA and some who stick with certain suburbs of ATL) and I know that they have had great success with these properties–and these are NOT newbies but people who know what they are doing and can see the potential in these less expensive houses. Likewise, some end up as flips, some do end up in rentals. I think this post is sound strategy but as always, knowing your market is important!
    Bo Wagner Attorney from Brookhaven, GA
    Replied 3 months ago
    I have several investors that I work with in the ATL area (some who invest in different parts of the state of GA and some who stick with certain suburbs of ATL) and I know that they have had great success with these properties–and these are NOT newbies but people who know what they are doing and can see the potential in these less expensive houses. Likewise, some end up as flips, some do end up in rentals. I think this post is sound strategy but as always, knowing your market is important!
    Roger Lissade Real Estate Agent from Hollywood, Florida
    Replied 3 months ago
    Hello Bo, Can you still find good deals in the ATL metro area for under 50K?
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Bo, Much appreciated
    Bo Wagner Attorney from Brookhaven, GA
    Replied 3 months ago
    I have several investors that I work with in the ATL area (some who invest in different parts of the state of GA and some who stick with certain suburbs of ATL) and I know that they have had great success with these properties–and these are NOT newbies but people who know what they are doing and can see the potential in these less expensive houses. Likewise, some end up as flips, some do end up in rentals. I think this post is sound strategy but as always, knowing your market is important!
    Erik Whiting Real Estate Investor from Springfield, Missouri
    Replied 3 months ago
    I’m your average Class C, Mid-West, $30K property investor and much of what this article describes is exactly why I like investing in these “pigs.” I don’t call them pigs, though; they’re my “little ATMs.” . It’s not my goal to become a multi-millionaire on paper; rather, I like steady, good cash flow, and the types of properties I invest in provide that nicely. I think there’s a point beyond which more wealth increasing quality of life, but massive wealth comes with way more responsibility and day-to-day hassle, so to me trying to build a $10 million portfolio holds little appeal. I’m already personally debt-free, own my personal residence free and clear, and could be financially independent today if I adjusted my family’s lifestyle down a few notches. For now I’m content to work the 7 – 4 job from my home office, drink good coffee, see my wife and kids each day when they leave for school/work and when they come home, and invest on the side. All thanks to my little ATMs!
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    haha Love it Erik and congratulations on your success Long live the ATM’s lol I wish you continued success
    Dave Hansen
    Replied 2 months ago
    Amen!
    Margie Kohlhaas Rental Property Investor from Algona, IA
    Replied 3 months ago
    I completely agree. I moved from California to Iowa. We basically have a 5 year return on investment rule. It’s an easy formula and it works well in the MidWest. There’s plenty of renters but quite a bit of apprehension when it comes to purchasing.
    Scott Luetgenau Rental Property Investor from Raleigh, North Carolina
    Replied 3 months ago
    Can you say more about your 5-year ROI rule?
    Kay Khan Flipper from Dearborn, Michigan
    Replied 3 months ago
    20% annual ROI. That is easy in midwest if you know your market.
    Kay Khan Flipper from Dearborn, Michigan
    Replied 3 months ago
    20% annual ROI. That is easy in midwest if you know your market.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Agreed. When I invest for myself I wouldn’t get out of bed for less than 15% lol Thanks
    Jonathan R. Investor from Wichita, Kansas
    Replied 3 months ago
    Within 5 years all the cash is returned and you still have the asset. Example, property purchased for 19k. 10k renovation, so almost everything was addressed, new hvac, new breaker panel if need be, kitchen, bathroom, and plumbing etc. So all in 29k. Property rents for $795 a month. Let‘s be conservative and call that only a net of $500 a month after expenses. $500×12=6000. 6000×5=$30k. I‘ve done several like this, mine return in 4 years or less on average but they are D areas. Personally I would rather have a Section 8 government deposit monthly than a working class renter, but to each his own.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Well done mate and great numbers
    Jared Garfield Rental Property Investor from Montgomery, AL
    Replied 3 months ago
    Engelo is my favorite Dingo, and he has so much wisdom to impart! Certainly the Mid-West has some of the best cash flow that there is, absolutely these properties when renovated can be mini ATM’s and give an excellent income stream when a buyer does their due diligence, checks out the operator to make sure that the renovations are well done and makes sure that property management is excellent. I think there are excellent points that 1) Risks can be lower when you buy small properties because you haven’t tied up your whole nest egg, or 2) If you are young and it’s your whole nest egg, it’s at least an affordable way to get started and a great way to learn. 3) Returns are higher typically which means you can get your down payment back faster and reinvest. 4) Where there isn’t competition you can monopolize the inventory and negotiate much better, so these are all brilliant points Engelo! 5) The tertiary markets like Engelo is investing are flying below the radar and have much better deals than most primary and secondary markets, so if the economy is stable you will typically get much better returns. 5 to 0 Engelo! However, there are a couple of points where I differ from my good friend (who is a veritable genius and my favorite podcast guest to date): A) High Appreciation and High Cash Flow Beats High Cash Flow: I wouldn’t say you should “Only” invest in $50,000 or less properties as the title suggests. First off this depends upon retirement horizons, risk tolerances and whether you prefer high cash flow, high ROI or a blend of moderate cash flow with superior appreciation. Properties I have done in Atlanta made me and my investors $100,000 APPRECIATION in SIX YEARS not counting 15-20% ROI from 2007-2013. Many of those homes were bought for $60,000-$70,000 turn key (and for $35,000-$50,000 before rehab) and were built after 1990. Now those were historically low prices that may not be around for quite some time. However, a really strong appreciating market where prices may be higher than $50,000 will out perform a cash flow market every time if you buy at the very bottom of the market cycle. (This is not available today until the next bottom cycle – so Engelo’s advice is good at this time, but keep this in mind during the next major correction when Baby Boomers exit real estate in mass). B) Return on Paper Isn’t the Same as Return In the Bank: I’ve owned a lot of properties that were purchased below $50,000 and the properties that were purchased below $50,000 and have found that going a little higher I’ve seen better appreciation, lower turn over, lower turn costs and more stability. Not to knock the higher ROI on paper, but sometimes it’s not achieved where the slightly higher priced properties perform better in reality.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Hey mate, Thanks so much for your comment. I think we are overdue for another podcast hehe You’re a legend mate and I’ll never forget my visit. Speak soon and let’s catch up over a call 🙂
    Jonah Freedman Rental Property Investor from Ithaca, NY
    Replied 3 months ago
    Interesting article. I guess we all do what we are used to. Where I live it will cost you 300k+ for an investment property or you can drive 30 minutes and get a property for half the price. I have properties in both areas. When I first started invested it made sense to invest in the cheaper area because they are purely a cashflow play. Now I only invest in the more expensive area I have found that even though in theory the cheaper area cash flows more when you take into consideration vacancy repairs etc, my properties in the more expensive area have actually cash flowed significantly better over the last 5 years. Also as an added bonus there has been tons of appreciation while my properties in the cheaper area are still worth the same amount that I bought them for. Happy investing! Cheers, Jonah
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Jonah and congratulations. Everyone know’s the market they invest in the best. What works and what doesn’t. As the saying goes “Each to their own”. Much success mate.
    Bryan P. Rental Property Investor from Novato
    Replied 3 months ago
    I’d like to see some real life examples with numbers … cap rate and then actual ROI over 2 -3 years with ALL expenses included. You could provide at least two “case studies” with one that did very well and the other that performed poorly — to be realistic and fair. It’s easy to speak in generalities, but the proof is in the numbers.
    Alex Price Rental Property Investor from Anaheim, CA
    Replied 3 months ago
    I like the article. The only thing with less than $50k properties is you can’t finance those. Assuming a $200 a month net cash flow, I rather have a $60k property with $12k ingested compared to $30-50k invested in a property.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    You can definitely finance but you might as well work and save harder. Buy with all cash. Control your own destiny. Much success
    Susan Maneck Investor from Jackson, Mississippi
    Replied 3 months ago
    You can, but it might take a little engineering. I buy houses under 40K. I use the BRRR method but pay cash initially. After I’ve owned the house for a year I apply for a first-place HELOC with a teaser rate. Wells Fargo will give those to investors. They will only finance up to 70% but since I’ve rehabbed the property it will often exceed what I originally paid. Closing costs are minimal or none. I have been able to interest rates below 4% by playing musical chairs with my HELOCs so I can pay them off each year and get a teaser rate again.
    Aiyman Khan
    Replied 3 months ago
    Great advice, can you please briefly elaborate on musical chairs?
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    You can definitely finance but you might as well work and save harder. Buy with all cash. Control your own destiny. Much success
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Bryan, I wish I had the time to compose such depth. I’ll leave that to those folks that don’t do deals but rather just write blogs and books all day long lol I’m too busy running a company and actually doing what I preach. Much success
    Tony Gunter Investor from Canton, Georgia
    Replied 3 months ago
    I like these myself, or at least they have their place in a portfolio I think. Have you found a magic bullet lender to cash out refi these? I know that might sound silly. In general I am asking with regards to the $75K’ish price range. I would like to ask Bo Wagner the same as I am in Georgia too. Tony
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Yes Tony, Speak to Jerry Padilla. He can help. Google him Thanks ps. Lima One Capital will also do refi’s
    Ross Denman Property Manager from Fishers, IN
    Replied 3 months ago
    I’m in Indianapolis and while every market is different, there are some deals at a $50k range or less and others to stay away from. I’ve seen several homes at $75k ARV that were purchased at $45k and needed $15k in work. They also tend to be median rentals (about $875/mo in Indy.) Here are some things that I would recommend taking in to consideration. Most lenders will to do loans for under $50k and some have even gone to $75k. Ensure that the home has an ARV/FMV of over $50k or else you may not be able to refi (BRRRR) or sell it retail as most retail buyers are going to use bank financing. You may find all-cash investors to purchase them… but most investors that I know are going to low-ball your list and get it for the cheapest price they deem reasonable. There literally are areas in my market that are nearly 100% investment properties. The only buyers for these are other investors. Most residents in those areas can’t qualify for a loan… heck, every other rent check is late. Appraisals tend to be weak in these areas and appreciation is weak as well because investment market prices tend to be suppressed by distressed housing sales and homes purchased at a lower price to meet cash flow goals. Personally, I look for areas with retail demand. Rents are higher. Sales prices are higher. Appreciation is higher. Homes will sale at full price here. I agree that this doesn’t have to been in the super suburbs, but in using this $50k advice… I’d look for areas with retail FMV sales in the area of $60k-$85k and start looking for deals at under $50k. I purchased my last investment property for $18k. We were all-in for $92k. It appraised at $124k but we only refinanced out a little over $75k for cash flow reasons. It’s rented for $945/mo. It’s not a slam dunk, but I’m happy with it… we technically purchased it for under $50k though. Didn’t want to be hypocritical 🙂
    Kirk Hause Rental Property Investor from Greenville, PA
    Replied 3 months ago
    This is my thought also. Buy at $50,000 or less. We bought a house for $25,000. This house has a tenant that has been there long term. We paid cash for the house but want to refinance it to buy another. We can’t find anyone to refinance it because it is under $50,000. Any suggestions?? How do you get financing for low cost properties?
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Kirk, Look harder. There are many lenders out there. It’s “easy money” again nowadays. I suggest being cautious when looking to finance. You should hold 50%+ of your portfolio with cash IMO Much success
    Andrew Ziebro Investor from Cleveland, Ohio
    Replied 3 months ago
    Ha ha ha ha ha. Bigger Pockets cracks me up all the time. I love how I get an email with an article titled “NEVER buy a property under $50,000 (Ben Leybovitch), and then the next day, “NEVER buy a property over $50,000” (Engelo Rumora). Come on guys, get it together. This is confusing for investors. Happens all the time on BP.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Bigger Pockets offers different opinions on the same topics. There is nothing wrong with that. If you are so easily influenced and affected by an article’s headline maybe you shouldn’t read them then? Just saying… Much success
    Steve Seeger
    Replied 3 months ago
    “A new series of articles we’re calling ‘Point-Counterpoint’ will focus on one real estate investing issue at a time from two different investors’ perspectives. ” I see how it could be confusing if not aware of this series, but seems to make sense to me. One man’s trash…
    John S Lewis from Jackson, NJ
    Replied 3 months ago
    @ENGELO RUMORA – so I’ve been contemplating very hard about this for a while now. And I’m not sure how to go about setting up a team in say Columbus. But, how do you get your money out when doing a BRRRR? Most banks don’t do mortgages on less than $50K. And I need something that does asset based/income based loans. Do you know of any in the area?
    John S Lewis from Jackson, NJ
    Replied 3 months ago
    @ENGELO RUMORA – so I’ve been contemplating very hard about this for a while now. And I’m not sure how to go about setting up a team in say Columbus. But, how do you get your money out when doing a BRRRR? Most banks don’t do mortgages on less than $50K. And I need something that does asset based/income based loans. Do you know of any in the area?
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Go to the market multiple times. It can take years finding/building the right team. Don’t rush and take your time. All the best mate Reply Report comment
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Go to the market multiple times. It can take years finding/building the right team. Don’t rush and take your time. All the best mate
    Jason R. Real Estate Investor from Orlando, Florida
    Replied 3 months ago
    You want to buy sub 50k houses in Ohio, home of the meth and pills and rent em out at $600 a month.. be my guest. You want to find a 50k in decent areas of growth in locations with good schools… HA HA HA Sorry.. but come on.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    I’ve only done it like 500+ times 🙂 Thanks
    Tim Lovell from Plymouth, MA
    Replied 3 months ago
    Eric I like the way you think, I am 57 done with the grind ready to invest and spend quality time with my wife doing what we want to do. Would love to chat and talk about best places to invest.
    Anthony Angotti Real Estate Agent from Pittsburgh, PA
    Replied 3 months ago
    Define “B class” as you talk about it in this article. I think we have a different definition based on what you’re saying you can get for 50k. . .
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Sure, There are different perceptions on the different asset classed. My B class is: 1) Good infrastructure supporting tenant/homeowner demand 2) 50/50 owner occupied and tenant occupied 3) Low crime 4) Most folks have blue collar working class jobs 5) Tenants pay rent online 6) No boarded up homes 7) Consistency in comparable sales 8) No janky looking parked cars Thanks
    Cynthia DeLuca
    Replied 3 months ago
    I are with your article and have done tons of this. I’ve been an investor and landlord for over 20 years and some of th least expensive houses I bought turned into the biggest upsides. You MUST know your area. I bought a 4 bedroom house on a double lot for $4,500, put $40,000 into it, and rented it Section 8 for $1050 a month. That’s what I call a cash cow, or as it was put earluer, a cash flowing ATM! I have done this multiple times, but you must know your market, know the Section 8 guidelines and know your improvement costs. If you’re not comfortable buying these properties, you can leave them for the rest of us that happen to love these. Thanks for sharing your insight.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Wow Cynthia, What an awesome deal with sexy numbers. My best one was a golf course front property purchased for $20,000 (Probate sale) Rehabbed for $25,000 and value was $125,000 🙂 I sold it but could have rented easily for $1,200+ Keep the dream alive
    Gloria Terrell
    Replied 3 months ago
    I’m in a major city and under $50K houses are in the “concrete jungle,” crowded with row homes where people are trying to move out of…not move in to. No doubt you can get a good deal but who’s going to buy it? I’ve seen houses under $50K in areas like NC but those are in nice areas and are single, detached homes with plenty of land. That must be the market you’re speaking of.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Gloria, Check out the Midwest. There are stunning markets offering deals for under $50,000 in great areas. Much success
    Wai Fung from San Francisco, CA
    Replied 3 months ago
    What are your recommendations for someone living in San Francisco?
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Move to the Midwest lol
    Vaughn K. from Seattle, WA
    Replied 3 months ago
    One thing I would like to throw out there is that $50K is really an arbitrary number to get a point across… That value can be rather higher, but still sticking with the idea: relatively inexpensive homes, in working class/lower middle class areas, but not the hood, that cash flow well. In many places such homes might be $75K or $100K… Because the median is $200K or $250K in that city, vs $125K or $150K as is the case in some midwest cities… But the principle is the same, and REALLY $100K isn’t that much bigger a deal than $50K once financed. The idea itself is pretty flawless, even if the actual dollar value swings some from city to city. Maybe he really is HARD on the actual dollar amount of $50K, but I take it to mean more the general idea.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    I somewhat agree Vaughn. I still think folks should look at the Midwest for such numbers. But “Yes”. If Manhattan had condo’s for $500,000 that would be a steal hehe. There is nothing wrong with any piece of property as long as the price is RIGHT. Thanks
    Shundreka Barkley
    Replied 3 months ago
    Do you mind sharing your contacts on that area in a PM?
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    You have to do the work yourself. My contacts might not be good to you or what you are looking to accomplish. Plus, we run a turnkey company in Toledo so we keep our folks close to us as good ones are very hard to find. Thanks
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    You have to do the work yourself. My contacts might not be good to you or what you are looking to accomplish. Plus, we run a turnkey company in Toledo so we keep our folks close to us as good ones are very hard to find. Thanks
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Donald and much appreciated. Catch you in the next one 🙂
    Brett Nobles
    Replied 3 months ago
    This article is dead on. I started with a duplex for $30,000 that rents for $1,200. Then moved up to a $75,000 4-plex that grosses $2,900 per month. You won’t get returns like that anywhere else. Not to mention these areas have extremely low taxes and the cosmetic costs are as low as it gets since the expectations are lower.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Wow Brett, Well done mate and great numbers. Hard to beat such returns. Much success
    Sasha Taylor from Pottstown, Pennsylvania
    Replied 3 months ago
    I’m a newbie in real estate investing so is it necessary for me to move to one of these areas in order to invest? I ask because I have heard many investors saying that you can invest in other states without living there.
    Engelo Rumora Specialist from Toledo, OH
    Replied 3 months ago
    Thanks Sasha, It’s very hard to successfully invest out of state unless you buy turnkey. Just my opinion
    Sylvia B. Rental Property Investor from Douglas County, MO
    Replied 3 months ago
    Engelo, you and Ben will have to duke it out, won’t you? (My money is on you.)
    Violeta Archer Specialist from Houston, TX
    Replied 3 months ago
    Excellent! Appreciated! I sent you an email and trust you’ll respond. Thank you! 🙂