I am looking at purchasing 1 of 4 quad-plexes in a small college town.
Although the target demographics are not from the college, it is in the lower-income neighborhood. I am very skeptical of purchasing property in such a poorly maintained neighborhood, and being an absentee landlord. The building was built in 1982, and in fair shape. What are your thoughts on doing an absentee ownership in a fairly degraded neighborhood. FYI the ROI is 20% with 5% down.
Just answering your question about being a absentee landlord, I wouldn't do it. Although I do know one person that lives in CA and has several properties in Ohio. He does have an excellent team of people that he can trust in Ohio. The PM is also a cop in the same city where the rentals are. I just know I wouldn't feel comfrontable not being able to visit my properties on a regular basis. I guess it comes down to how good of a PM you have and how you are going to work through the legal issues.
5% down. There goes the theory about lenders asking for between 20%-30% down on residential multi-family properties. Now I am really confused. Many authors make it sound like that is written in stone...
TC is right. I would interview a few PMs in that area. get a good feel for how they do business. My PM does a walk through before I buy a property to make sure it is in an area and a condition that she wants. If she doesn't want it then I don't.
Run down areas are harder to get good tenants with a PM. Most don't have the credit, and can't pass the back ground checks. College rentals might be a different story.
What ever return you want on your money is up to you. The amount you can finance the property for is up to the bank. You make your money when you buy. Usually 80% of appraised value.