Mortgage Broker · CA · Member since 2014 · 1k+ posts · 642 votes
I see a lot of posts mentioning fairly cheap purchase prices. I've lived in upstate NY, and am now in Los Angeles. I know real estate in upstate NY isn't too pricey, but I wanted to get a feel for some other cities in the US where one could buy duplexes, triplexes, and even 4-plexes for less than $50,000. I'm not talking about markets where every once in awhile there is a fire damaged or severely neglected property at that price, but areas with a good supply of real estate the under $50,000 price range.
Detroit is probably the only place I wouldn't want to go!
there is no such thing as a $20k property in a C+ area, those would be D average at best. Cheap homes normally under $45k usually are bad investments. I have seen this first hand as these investors who buy them within 2yrs are praying for companies like ours to buy them from them. Anyone selling these investments are usually not looking out for their clients.
I bought a home in Feb 2012 for $24,900 and it's almost at 2 years. I'm not praying for anyone to buy it from me, I'll hang onto that one for as long as I can get money out of it. Same goes for the ones I bought for $23,000 and $24,000 -- don't want anyone to take those little money machines away from me!
Investor · Austin, TX · Member since 2012 · 68 posts · 19 votes
12y
I am from Fort bragg/fayetteville NC, now living in Austin Texas. I can tell you the taxes in North Carolina were tiny in comparison to most parts of Texas. suburbs of Dallas, Texas and Houston texas are great. I am looking for rentals back in my home state of North Carolina in charlotte, greensboro and greenville. Great areas, great returns.
Real Estate Investor · Washington D.C. · Member since 2011 · 3 posts · 0 votes
12y
Ericka I'm from those areas of NC as well. Currently living in D.C. now though. I recently closed a deal here about three weeks ago. Plan to use the proceeds from that deal to buy something in NC. I'm actually headed to Greensboro this week to look at a 12 unit and a 13 unit apartment building. Let me know if you'd like to discuss possible partnership opportunities.
Phoenix, AZ · Member since 2013 · 10 posts · 0 votes
12y
I am very impressed with the purchases you made and I am shocked that the are renting so high. I have been looking at properties in Peoria Illinois and they are so cheap. I am however concerned that the neighborhood isn't so good and the property values wont last too long. I notice that property values are dropping across Peoria Illinois, what do you think could be the cause of this drop in value?
Real Estate Investor · Kirkland, WA · Member since 2012 · 480 posts · 116 votes
12y
Are these areas with low prices but high rents really old houses? I suppose that would be OK if they were kept in good condition. Are newer houses in those areas also cheap? Columbia and Greenville are not that rural are they? Do the property prices jump up around the coast such as Charleston. This is an interesting topic so trying to make some sense out of it. Seems like WA state, California, etc, are very expensive unless you go way out into a rural area. Maybe the best thing would be a mix of properties like these along with ones that are more likely to appreciate. Seems like if you're stuck working in an expensive state, other than turn key, it would be pretty difficult to own properties out of state, right? If not, how would you go about it?
Real Estate Investor · Kirkland, WA · Member since 2012 · 480 posts · 116 votes
12y
One other thing - seems like some of the northern areas with harsh weather extremes must have to deal with extra maintenace issues. Heating and cooling equipment probably gets more use, maybe more maintenance, right? And maybe roofs don't last as long? Here in Western WA, we don't need air conditioning and our winters are mild. Roofs can last 30 years. Trying to consider what areas and things might have higher maintenance costs. Are there other considerations?
I am very impressed with the purchases you made and I am shocked that the are renting so high. I have been looking at properties in Peoria Illinois and they are so cheap. I am however concerned that the neighborhood isn't so good and the property values wont last too long. I notice that property values are dropping across Peoria Illinois, what do you think could be the cause of this drop in value?
I live and invest in Peoria, and I have noticed property prices stabilizing and going up. (at least in the areas I'm looking).
By dropping, did you mean low? Because that's definitely true.
There is a large section of Detroit/warzone in our city referred to as the southside. I could buy houses and get them rent ready for under 10k, rent for 500, but it's not worth it. (plenty of landords do buy there though)
We have alot of older homes converted into duplexes-triplexes in a bit nicer neighborhoods. They can be had for 20-50K. I don't get excited about them because the utilities aren't generally split. And they are very old like 1880-1920's.
Here is Pennsylvania, there are lots of older housing stock. I've owned houses as old as 1840s and there are lots of 100 year old houses here. But in the lower price ranges like $50k or less central air is not common. We do have winter, like today, yesterday we had freezing rain on top of existing snow base.
I have not noticed shorter roof life here. I sold a property where the roof was 120 years old, it was slate. Some older houses still have their original slate or metal roofs which if cared for can last 100 years+ Sun seems to cause as much damage to shingle roofs as anything.
We've also had some older furnaces/boilers in the 50-70 year old range that were in good working condition, but we replaced them for new more efficient models.
We've had hot water heaters fail at anywhere from 6 years to 35 years,
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
12y
I know there are some multis like the original posters question and price range in McMinnville, TN. And about the other discussion on low-priced houses, I have some that are doing very well for me, and one or two that are not. Houses where I'm all-in in the 20s.
Now, I've lived in TN most of my life. And I really don't understand the allure of Memphis. Some areas over there have some of the highest crime rates in the nation. Could someone please explain to me how it's such a sought after place to invest? Are you really investing in the sub-burbs like Cordova, or are you really in Memphis? Please esplain.
I live in the heart of Memphis and I love this City. There are amazing things going on here. We rank number 1 in the nation in a variety of positive areas--unrelated to crime. Crime is concentrated in high-poverty neighborhoods; it's a common story across the U.S. All of Memphis isn't poor though. There are many working class and middle class families who make great tenants.
For outside investors, Memphis is a great place because you can buy properties that cashflow. Simply put. The same goes for local investors--except we get the added benefit of seeing and participating in neighborhood revitalization.
You would have to come here and check it out to understand. Most people are not investing in the high crime areas. Cordova is a great rental area but also Bartlett, East Memphis, Col Acres, SE Memphis, Fox Meadows, Berclair, Some parts of Raleigh are some really good areas.
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
12y
OK, but why not Nashville, Chattanooga, and Knoxville. Great cities in TN with less crime than Memphis (or that's the perception at least from those of us who are east of the river - TN river that is). Seriously, it seems like all of West TN is so very different from the rest of the state. Are the investing returns in Memphis really that much higher than what can be found in Chattanooga, Nashville, and Knoxville? Or has Memphis just gotten a lot of hype in this regard?
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
12y
People choose Memphis over those cities bc the price points are better here then any other place in the state. Rents are stable and higher on average then most other places in the state.
Insurance Agent · Olympia, WA · Member since 2014 · 168 posts · 88 votes
12y
Before buying a low-priced investment property, it's a good idea to read a bit about the Biggert-Waters Flood Reform Act and to be very sure the property won't be affected. Reform has been delayed, but it will eventually come, and any property that has a flood risk can see a substantial change in premium for flood coverage in the coming years, which can completely upset the cashflow model.
As an example, we were looking at some properties in Annacortes/Grays Harbor in Washington that look pretty good on paper today. If the flood subsidy was removed, though, a property that would probably net us $150 to $200 a month now could end up costing us $350 to $400.
Nashville, TN · Member since 2013 · 21 posts · 3 votes
12y
Awesome Jenna
That's exactly right. I recall when I purchased my first USA property in East Nashville SO many well-meaning people said don't do it - it's a terrible area - it's full of crime and it's a bad investment. Well….
They were wrong. East Nashville has become one of the hottest real estate areas of Nashville and it's an awesome area. I'm so glad I ignored the hype and misinformation and got myself an awesome performing property.
Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
12y
OK, all of you Memphis fans? What kind of numbers are you seeing over there? Rent to purchase price, or rent to ARV or whatever metric that you may use.
I still can't understand what kind of demographics or economic situations would make Memphis so much different/better than say, Birmingham, Hunstville, Nashville, Chattanooga, etc.
Phoenix, AZ · Member since 2013 · 10 posts · 0 votes
12y
From what everyone is saying, it looks like there is no replacement to living within and fully knowing an area before one invests there. I live in the Phoenix area and I have been seeing the home prices rise drastically and I am beginning to think that the market is over priced again. But this is the only area I have lived in, does it mean I am doomed to invest here no matter what? I have been offered property in Taos area of New Mexico but their population is so low but the property values are very high. This completely baffles me. How can property values be high in an area with a very small population? Their median income is relatively high, crime incidentally is higher than average for the US. I am quoting US census figures here. How can one tell without going to a place if its safe to invest and how can one tell for sure if a property will rent?
Boise, ID · Member since 2014 · 40 posts · 13 votes
12y
@Francis Okeke I've lived in SLC, Oklahoma city, Dallas, Cleveland, Biloxi, Eugene, Boise and any number of little cities in between. I'd never invest in a place that I've not lived in or been around. As they say when you are buying a single family home. Drive by at night on a Saturday...Neighborhoods can change dramatically even from street to street. Cross X boundary and it becomes total junk. But thats just my opinion.
I see a lot of posts mentioning fairly cheap purchase prices. I've lived in upstate NY, and am now in Los Angeles. I know real estate in upstate NY isn't too pricey, but I wanted to get a feel for some other cities in the US where one could buy duplexes, triplexes, and even 4-plexes for less than $50,000. I'm not talking about markets where every once in awhile there is a fire damaged or severely neglected property at that price, but areas with a good supply of real estate the under $50,000 price range.
Detroit is probably the only place I wouldn't want to go!
Stephanie,
Detroit is a challenging area but I could help you find a duplex, triplex, fourplex in a decent area if your interested, just PM me if you have any questions on the area.
One key to investing in Detroit is to understand and know the neighborhoods where you are investing. The City of Detroit has a land mass big enough to fit San Francisco, Boston, and the New York borough of Manhattan within. Detroit in the 1940-1950's was the 4th largest city in the US. In 2000 it was still the 10th largest city in the US after decades of decline. During the recent real estate market decline & bankruptcy of some American automakers, between the period of 2000-2010 the population of Detroit further declined another 25%. Falling home prices nationwide allowed many wanting to leave Detroit the ability relocate to its surrounding suburbs and/or elsewhere. In 2012, it appears the City of Detroit has fallen to the 18th largest city in America with a population down to around 701,475. The City of Detroit has a very unique opportunity to replan itself due to the large population decline and available land mass. Its very easy to pick a property in the middle of nowhere in Detroit with so much population decline & empty space if your not familiar with the area. Note: While the inner center of Detroit has declined the surrounding metro area has always continued to grow throughout the years. (Its some very good deals to be made in the suburbs of Detroit also)
Basically what I'm saying is, many people still live with the city (more than most large US cities). While Detroit now has a population reflective of its 1910-1920 years, its infrastructure is setup for a city 2 to 3 times its current size. Today the auto manufacturing companies are doing well again and the City of Detroit has taken a tough step to declare bankruptcy which is the largest municipal filing in U.S. history with an estimated debt between $18-$20 billion. There are numerous revitalization efforts currently taking place in the city and now through bankruptcy the city has taken even further action to reverse its decline and set itself up to better provide essential services and a better quality of life for its residents. Many areas in downtown Detroit where significant investments have been made are seeing a significant population increase.
If you are looking at a near term flip then maybe inner city Detroit is not a good investment unless your looking downtown and/or a few other areas. If your are just looking for a cashflowing property (I'm assuming at the prices your looking for that you will have not mortgage, it many other good areas in the city that you could also score some good deals)
Keep looking around for the best area that fits your investment strategy, but I wouldn't rule out Detroit for a rental market.
Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
12y
Hi J. I think Memphis gets talked about so much because the volume of high yield lower priced homes is so high. I don't know enough about other cities to answer your question but when I researched the USA Memphis stood out in terms of average yields and affordability. I was investing in Atalanta and Phoenix as well but dropped them both as Memphis just makes too much sense to me!
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