location or cash flow

[Mel Rosario]

which is better so so location with cash flow, or desirable location but no to little cash flow? I am looking into a property that has a net operating inc of 52K with a cash flow of about 17k per current owner. Owner is selling the place for about 800k for 8 mixed units. Looking at the area, it is surrounded by businesses, storage facilities, a railroad, and very few rental complexes but near a main highway. My other places are much nicer but don't give me this kind of cash flow. I'm just concerned if i purchase this, how hard will it be to sell it in the future despite the cash flow? Any opinions. does location matter, future appreciation if any, cash flow?

I love this site, so many helpful people!!!

[Silver A.]

Mel,

just as it is more of a challenge to sell a property in a bad location, it is just as challenging to find tenants to a property in a bad location. At least they expect to rent the property for less than similar properties are going for in desirable location. The cash flow might look good on paper but if vacancies are three times longer due to not-so-good location than they would normally be, wouldn't that impact the cash flow? ;)

It might make sense to purchase something in a worse location just for cash flow as a long term investment if you know the area well and are absolutely sure that you can rent it and make a profit - go for it. You could even sell it later with owner financing or lease option... but if it looks like a gamble (you have no solid numbers and you are just hoping that it'll work out) - don't even touch it with a three foot pole and stay away.

What are the "mixed units" ?