Hello everyone, I am looking into making my first investment property purchase. I am interested in getting into rentals. There is a duplex in a class C neighborhood that I would not personally want to live in personally but is affordable housing for $47000 and rent is $400 per unit on 1 bedrooms with one long term tenant. Typically the duplexes in this area go for about $60k so I assume it may need minor work but I have not been there yet....
My real question is, would you guys recommend strongly against this purchase in a neighborhood which will potentially attract problem tenants if the numbers work? Thanks in advance!
P.S. - What advice would you give to a young investor with no experience looking to get started?
Howdy @Marshall Le , and welcome to the BiggerPockets forums!
My two cents on this are going to strongly depend on 1. what you want to accomplish in 10, 20, and 30-years from real estate investing and 2.what you can afford right now.
IF you want to buy rental properties and hold them over the long haul (think, say . . . 27.5 years or so?) and you have income now (can live without the cashflow today) then I would think through the lens of "what do I want to own in 30 years." Pulling from the experience of way more successful investors than myself, a common trend among them is that the first homes they purchased were "good opportunities" and not necessarily "good investments." There's something to be said for this, as those "good opportunities" get you repetitions that lead to clarity and skill growth, so they are not to be avoided, but if you see yourself owning property for a few decades and have the budget for it now I'd look for things that cashflow well in good areas on normal lots (i.e. not too small, not too shallow, but just right)
Thank you, I appreciate this point of view. I have no trouble waiting and there are properties that I would rather own in the long haul but this wouldn't eat up too much to get started with which is why it peaked my interest. I have about $30k to invest and am not trying to rush anything. I appreciate the feedback!
It's hard to advise without a more complete set of monthly expenses and necessary repairs. This could be a good deal or a terrible one depending on those numbers.