I'm tired of barely scraping by and I've decided to give the BRRR thing a go. The most I can afford is a $40k-50k home. I live in Connecticut but the prices here are insane so I decided to try Florida since my grandmother lives down there and she can be my local connection.
I see everyone talking about $100k+ homes in Florida, is it not a good idea to buy $40k rentals in Florida? I also notice there are a lot of houses sub $20k in Florida that seem decent. Are these bad targets? I don't really have any current debt but my earnings are barely enough to get by at the moment. I can't afford much but I'm hoping to use this BRRR strategy to get out of poverty.
Let's assume I have my finances in order. back to the original question. Is there something wrong with buying $40k or less rental homes in florida?
No, there is nothing wrong with this.
I bought a house for 5K in Waterbury CT.
It is not a great looking house ofcourse, but if you are smart, repairs can be done intelligently.
Rent in that area is about 1000 section 8. Repairs about 15-20 K.
In a few years it will have paid for itself.
Before:
Then:
NOW:
We found beautiful brick under the plaster. So we are keeping the brick, and not bother doing framing, sheetrock mudding , taping, paint...
Same with the ceiling.
We are going for this look:
No, there is nothing wrong 40K houses. It is all and only about the numbers!
I love you man but come on that's not a 15k rehab or 20k rehab that's a 50k kitchen alone... but looks cool..
for most investors ( and I say most because I think this is true) 40k so called rentable homes by providers is in the worst area of the towns and are really tough long term investments.. they will look like the one you just posted in about 5 years of wear and tear..
Ha ha. I know. I just meant that I am going to do exposed brick. Not going to do such amazing finishes for section 8.
You say you love me but you never take me out for dinner! Player!
I've spent the last few days on Zillow looking around Florida for "deals" that are $40k or less and I've spotted a handful of reasonable deals to my newbie eye but there are so many variables I am unsure about. Far too many.
What areas should I be looking in? What is a realistic rehab budget for these types of houses?
Can I realistically buy a $40k or less property in Florida and make a reliable positive ROI? My family members are talking my ear off about how I'm just going to fail and go into debt. They are the most glass-half-empty people I know so I'm not foolish enough to listen to them but it's not helping my outlook.
I'm fearful of the short term money loan option in the BRRRR, I lack confidence and experience. I think it might make more sense for me to live in the house to eliminate holding costs and do some of the rehab myself (which I know nothing about).
My goal is to make $2000 per month of passive income from rentals, heck even $800 would be a life changing amount, but my current life situation makes it extremely difficult for me to save money and leaves me with little to spend, thus I can only afford maybe a $40k mortgage.
It's really difficult to see where I can fit into this, maybe I'm just fooling myself and I cannot enter real estate? I don't really have anything to offer a third party investor.