Well at $50k you will have some minor cosmetic repairs nothing crazy. Tenants would be your regular blue collar, in metro Detroit we have the big 3 so very good employment with future growth and very well paying jobs. I’ve been in the rental sector for over 10 years with only 1 eviction. Not a bad track record but you never know what’s in the future. I do property management but I do have a great company to get your property under good management.
Lots of places but the cap/ex will kill you if you aren't self managing. Don't fall for the trap you are much better off using the $50k as a downpayment.
Lots of places but the cap/ex will kill you if you aren't self managing. Don't fall for the trap you are much better off using the $50k as a downpayment.
I’m not debating that point. 50k may very well be to low of a bar. What I was considering was to buy a number of houses for cash flow that would have low to no leverage. I already have quite a number of higher priced houses with loans. I’m simply reviewing my model for safety.
Joe the sounds of it your strictly seeking cashflow, if that's the case house prices in $50k range give you a lot more leverage more cash flow then any deal That you will need to put $50k as down payment. If your seeking to pay no cap/ex and make money on appreciated areas then $50k houses are not the way to go. Also if you want to eliminate Cap/ex you may go into a $20/$30k house put $10/$20k in rehab and that takes out the Cap/ex. And your cashflow still high. This is an issue I have with lenders, they won't lend on deals I find because of their minimums of $100k or $75k, but what the lenders usually do not review or care is that a $50k house cash flows $100 to $200 difference then a $100k house, $50k house does a lot better DTI. Example I recently did, I purchased a SFH for $40k rehab was $17k I rented it out for $950. There was another SFH adjacent to the town I purchased the $40k house and that one was for $112k needed about $10k in rehab, rents around $1200 max on Zillow so if you were in a pitch (high mortgage payment) you would let it go for $1100. Short story the difference from high to low is $250 in rent range($950 vs $1200) The mortgage difference rough numbers $539/Mt for $112k 20% down at 6%. $191/Mt for $40k 20% down at 6%. Showing these numbers to a lender they still would take the higher loan.
@Joe S. OKC has 50k houses. They are typically in a higher risk area, but nothing crazy. I looked at one last week that was in a very blue-collar/predictable area. It has value add potential to push cash flow to ~$200/$250 per month. Happy to show you some examples. Good luck!
@Joe S. OKC has 50k houses. They are typically in a higher risk area, but nothing crazy. I looked at one last week that was in a very blue-collar/predictable area. It has value add potential to push cash flow to ~$200/$250 per month. Happy to show you some examples. Good luck!
Is that $200-250 per month with property management?
Joe the sounds of it your strictly seeking cashflow, if that's the case house prices in $50k range give you a lot more leverage more cash flow then any deal That you will need to put $50k as down payment. If your seeking to pay no cap/ex and make money on appreciated areas then $50k houses are not the way to go. Also if you want to eliminate Cap/ex you may go into a $20/$30k house put $10/$20k in rehab and that takes out the Cap/ex. And your cashflow still high. This is an issue I have with lenders, they won't lend on deals I find because of their minimums of $100k or $75k, but what the lenders usually do not review or care is that a $50k house cash flows $100 to $200 difference then a $100k house, $50k house does a lot better DTI. Example I recently did, I purchased a SFH for $40k rehab was $17k I rented it out for $950. There was another SFH adjacent to the town I purchased the $40k house and that one was for $112k needed about $10k in rehab, rents around $1200 max on Zillow so if you were in a pitch (high mortgage payment) you would let it go for $1100. Short story the difference from high to low is $250 in rent range($950 vs $1200) The mortgage difference rough numbers $539/Mt for $112k 20% down at 6%. $191/Mt for $40k 20% down at 6%. Showing these numbers to a lender they still would take the higher loan.
So you don’t know any lenders that do small loans in your area?
@Arsen Atanasovski Just google PrimeLending. I'm not trying to be difficult. My post about lending got deleted by an admin in the past, so that's why. I will PM you the person I worked with in the past.
Not sure if Mississippi is a war zone but I was down in Meridian for a family visit and there were pretty cheap SFH, a lot of them. Appreciation seems horrible, not sure what the rent goes for in that market, but worth a look. I know they have a naval air station in Meridian as well.
I have enough to buy a couple for cash, but it is looking hard finding someone to do a refinance on that amount, especially on a stated income product.
I have a personal lender that loans, but he wants 10 percent. So that kind of interest would hinder cash flow.
@Joe S. Why is it hard to Refi? After a short holding period there are lenders in this area that do 15 year investor loans with NO closing cost... if you payoff within first 3 years you need to repay closing costs. Rates are competitive too...5% or less
The west side of San Antonio has houses for sale below 50K on a regular basis, especially off market deals. Some other issues can come up (title mainly), and the quality of the neighborhood literally varies from pocket to pocket, but I've seen some nicely cash flowing rentals set up there and also some very lucrative owner finance properties.