Would you buy a duplex that needs about 15-20k in renovation (Dad has a construction company & I am also very handy so plan to do a lot of the work myself) which has negative population growth( -6% since 2000) but is around the corner from your job(literally walking distance)
Or would you
Buy a duplex in a growing population location (22% since 2000) that's 45- 50 mins away from your job which you would have to pay about 60-80k more then your budget in your criteria or that you wanted to pay for your first property.
I work for a government job & have been there for over 5 years. I also don't plan to quit soon well not for 3-4 years because I actually like working there. I'm househacking it so I won't be tied to the area, well hopefully not that long( My Goal is to buy 20 units in 3 years).
So my question is which duplex would you choose to buy & why?
@James O Nix Is this your first deal? If so, definitely not the second property.
Next question I'd ask is why has the population in town 1 declined? Industry moving out? Crime rate increasing? If your goal is to get to those 20 properties, it honestly seems like neither of these deals are good. But if you really are looking to get started and learn, I'd go with option A. Just make sure you have exit strategies in place in case things go south.
@Marshall Leipprandt thanks so much, & yes it’s my first property. But I would like your thoughts on why do you feel as the first property wouldn’t be a good investment to get to the 20? It seems like to get into a property & be able to build value thru sweat equity is a good investment. Am I wrong or just got something mixed up?
@James Nix seems your instincts are telling you that buying in a declining market isn't a good idea.
I'd rather see you buy into an emerging market that stands the strongest chance of holding up in the next market downturn.
Also, I'd like to encourage you to focus on the net income you're trying to achieve INSTEAD of the number of units want.
The bricks and sticks don't produce cash flow. They help you build equity/wealth.
The margin between your total expenses and total income is what creates the cash flow.
Strive for achieving your goal with as few units as possible. Focus on your net income - not how many toilets you have.
Best to you.
@Al Williamson thanks for tip. I never really thought about that & it makes so much sense why would I strive to make more work( more units) vs getting my set income goals. What are your thoughts on buying in a declining market? Would you do it
The easy answer is "No, I would not invest in a declining area."
But the full answer is, "Maybe."
If you know the area's future plans and you want to be a part of it's future - then "Yes" buy into it. The area may be transitioning from residential to commercial. The property may be more valuable with a different zoning in the future. Who knows!
Since you give me the impression that you don't know your City's plans, I'd like to encourage you to do some homework. Gather local information so you can predict the next three moves on the chest board.
If the area has a bright future, according to the local information that you gather (not hear-say), then make a well informed investment decision.
Best to you