Is "not at any price" in your vocabulary?

[Adam Bradley]

I'm in a situation where I'm not sure if the area makes it a "not at any price" deal. I know that you need more info to say "I'd do it" but my question is: are certain areas a hard "no" for you ... at ANY price?

Details:

Fiveplex - all 2/1

currently completely vacant

built in 1965

in a D area (currently bars over non-broken windows, others gone completely with just plywood)

I can buy for $20,000

needs $30k repairs/upgrades

can definitely immediately rent out, after repairs/updates, at $425/mo per unit

would be managed by local property mgmt co

Would the "D" area make this, or any deal, a hard no for you?

Thanks a lot for your input.

[Jay Hinrichs]

Everyone above has made great points..

look at it this way .

you have a 425.00 rental what is the standard for putting a tenant in a rental  3X rent = gross income .. so tenant is qualified at 1200 a month .. to move in.. minus 425 leaves them 775.00 a month to live on less than 200 a week to pay for UTLS food transportation if any.. your simply getting in many instances the least stable folks in the US.. they have one little upset and they usually do what happens rent does not get paid.. there is a reason these properties trade at those values and rent at those numbers.. its simply not exponential in  a backwards fashion that 425.00 rents are great since they are so low if that makes any sense.

like @Jason Hirko  says if you have 100 of them and have all in house management and turn over services you can make a run at it.. I have clients that I have funded for going on 2 decades that own hundreds of these.. but even then.. they bottom out at 650 to 700 rents.. and many in your great state.. that leaves their rental criteria at 1800 to 2100 a month gross income to rent from them leaving them 250 a week to live on .. which is just about doable..

Just think about it for your self how would you manage at 175 a week total to cover all your living expenses.. I really think if you put it in that perspective you begin to see that higher quality properties are more sustainable.  Also Chris Clothier was the one who opened my eyes to this one years ago.. and of course my vendors over the years.