Low Income Investing

3 Replies

As an investor, what is your limit regarding investing in Low income areas? For instance, I just saw a MF in a low income area come on the market that is around a 12 cap. The property is located in an area where the value of homes have remained stagnant for nearly 20 years. However, like I said, it cash flows strongly due to it being Section 8. If the numbers make sense even when you factor in additional maintenance for repairs, would you invest in it strictly for the cash flow as long as crime isn't ridiculously bad, or would you steal clear and why? Thanks!

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A lot of people have very negative views of investing in low income areas, there is a lot of info on prior forum posts.

My husband and I have focused on this niche and its working for us.  The cash flow is good, have to be realistic that it will take more time to self manage or it will be more difficult to find a good property manager.

We have duplexes.  In a multi, I would think there would be even more drama of the tenants not getting along with each other.

On the west coast CAP 10 is more common. We've seen rent increases recently, but even when they were stagnant we had good cash flow. We've only had one eviction, cash for keys is effective in this niche. Tenancy length varies, average a bit over a year, we've learned to move fast to have minimal empty days.

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