Anyone out there specializing in under 30k properties?

Buffalo, NY · Member since 2014 · 82 posts · 75 votes

I'm looking to form a networking group of people who specialize in under 30k properties for cash flow. I propose we share ideas to help each other maximize our success!

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Elizabeth S.

Real Estate Investor · Fort Wayne, IN · Member since 2013 · 168 posts · 78 votes

12y

I buy houses in the $18,000-$23,000 range, typically put $3,000-$5,000 in them and then rent them for $650 a month. @Matt R. is right about the roof and furnace, they are profit delayers.

The key is to know the area or work with someone who does.

There is more to investing in any house than just working the numbers ahead of time to see if it will have positive cash flow and those are the factors that will kill you.

1. Contractors that you can trust, that do the job correctly and go above and beyond for you since you're not around.

2. A property manager who can rent the house to good people and make sure they are holding up their end of the contract.

People who buy expensive houses have the same issues, their tenants just drive nicer cars. It's all a process, just jump in and learn the lessons good and bad.

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Brant Richardson
Investor · Santa Barbara, CA · Member since 2013 · 658 posts · 315 votes
12y
Check out podcast #54 with Lisa Phillips. If I lived in an area with properties in the 30k range I would be doing it. Those properties tend to need more attention from landlords so as an out of state investor I'm going with properties a little higher priced.
14 Reply
Chris K.Pro Member
Investor · Baltimore, MD · Member since 2012 · 1k+ posts · 655 votes
12y
I wouldn't consider myself a specialist yet but most of the properties I'll be going after are in the $30k-$40k range.
14 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Originally posted by @Douglas B.:
I'm looking to form a networking group of people who specialize in under 30k properties for cash flow. I propose we share ideas to help each other maximize our success!

Cool Douglas, I am down. I have some working theories. One wrong move at this price point and the whole thing can go south. Here is a partial list.

1. No bad areas.

I know this seems counterintuitive but it's critical as tons of these props maybe 90% are in bad areas. So lets define what is bad.

2. No high tax rates. I have seen tons of these 30ks where the property tax is 3 months rent. I just don't see a business model thriving when you are in the hole 25% every year. So lets define what is tax attractive.

3. No run down properties that can't be renewed for more than 10%.

The roof or hvac is same cost on 30k vs 300k. One wrong move here and your bk on that house. So lets define what is acceptable.

There is much more of course. I am typing on tablet so I will delineate when I can get to keyboard.

Thanks BPers!
30 Reply
Elizabeth S.
Real Estate Investor · Fort Wayne, IN · Member since 2013 · 168 posts · 78 votes
12y
I buy houses in the $18,000-$23,000 range, typically put $3,000-$5,000 in them and then rent them for $650 a month. @Matt R. is right about the roof and furnace, they are profit delayers.

The key is to know the area or work with someone who does.

There is more to investing in any house than just working the numbers ahead of time to see if it will have positive cash flow and those are the factors that will kill you.

1. Contractors that you can trust, that do the job correctly and go above and beyond for you since you're not around.

2. A property manager who can rent the house to good people and make sure they are holding up their end of the contract.

People who buy expensive houses have the same issues, their tenants just drive nicer cars. It's all a process, just jump in and learn the lessons good and bad.
38 Reply
David Lee
Wholesaler · Lenoir, NC · Member since 2013 · 297 posts · 127 votes
12y
I have 5 properties and everyone that I have purchased is under $30,000. The last 2 were under $11,000. I had to put about $6,000 in each after I purchased them.
23 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
I would like to add pre screening tenants before closing. Or even before offer. I run test ads first. This will let you know quickly the demand and rental rates and more importantly what type of tenants will be paying your bills. You could also check the PMs which you are going trust but verify.

I definitely want something special or unique with the property from a renters perspective. Cool location, walkable, views, large lot, corner lot, schools etc...something that a renter can't find so easily.
10 Reply
Pyrrha Rivers
Investor · Yokosuka, Japan · Member since 2014 · 631 posts · 184 votes
12y
@Elizabeth S. and @David Lee I am trying to get this specific strategy going in DeKalb County, Georgia. I keep hearing from brokers, Realtors and PMs that $30K or under may not be feasible. Well, in addition to my lack of experience, I have yet another hurdle which is extreme long distance. I'm in Japan! I just found out that in addition to not being able to see and touch my prospective holdings, getting money will not be easy. I contacted a lender about getting a HELOC on my personal property which is paid off and although the property is there, I'm a federal government employee with good credit, the answer was that because I am not there they can't help me. I will keep working on that but for now I have to work with what I have which is the $30K and below entry point. Like Elizabet says, I'm jumping in and will learn as I go. Any tips? Can I join this group although I have a great big nothing right now? Willingness to work and learn...I have that! :)
7 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y

C + hoods ...I heard on bp

30k deals worth 60k formula or any mathmatical variation.

option hold/sell/refi.

Thanks
3 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Originally posted by @Pyrrha Rivers:
@Elizabeth S. and @David Lee I am trying to get this specific strategy going in DeKalb County, Georgia. I keep hearing from brokers, Realtors and PMs that $30K or under may

Hi Pyrrha,

That maybe the case where the under 30k is too far gone or gone better. See youtube maybe. I am going to look.

Thanks,

Matt
0 Reply
Dustan Marshall
Investor · Hamilton, OH · Member since 2013 · 139 posts · 27 votes
12y
what a great topic. I really like this price point. My entire business model is focused around entry level properties. Especially properties in the 30k - 40k range with less than 10k in rehab. I just finished mu first buy and hold with this strategy and I am really enjoying it.
11 Reply
Rob K.
Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
12y
I like the $25,000-$35,000 price range. I'm able to find houses in that range that need minimal work and rent for $800-$900. They are in areas with some property crime, but little violent crime. I stick with 3 bedroom houses with a basement and/or a garage.
8 Reply
Randy Ferguson
Robinson, IL · Member since 2013 · 9 posts · 7 votes
12y
Please count me in Douglas. I hope to purchase my first investment property this year and am looking in the 30 and under price range for sf and maybe even find a few multi-family units in that rage as well. I saw a move in ready tri-plex on the MLS the other day for $27K, so they're out there.
6 Reply
Moe C.
Investor · Palm Bay, FL · Member since 2013 · 45 posts · 14 votes
12y
I love properties if I can be into for under 35k after rehab. I think it is perfect for 650 a month. I currently own 2 and hope to get 2 more this year.
9 Reply
Bob Hines
Real Estate Investor · StL, MO · Member since 2008 · 294 posts · 152 votes
12y
Sub $50k is a great market as it's hard to find financing for amounts less than $50k so most owner occupants can't purchase these homes. I've noticed here that houses will sit for a long time at $55k-$60k and then drop to about $35k as there is a vacuum in the middle; owner occupants can't finance and investors won't pay those prices.

I second listening to Lisa's podcast. Pay special attention to where she suggests only investing in this market locally and why. You really need to know the area as it really can be a different world block by block. I see what people peddle here with great returns in that price range-the areas they are in-I wouldn't buy any of them with your money! From what I have seen locally, if a "wholesaler" lists a house for $30k, it's certain it really could be purchased for $15k off the MLS. A true open market $30k house will be listed for $59k by "wholesalers". So be warned if you choose to be an out of state investor in this price range.
12 Reply
Scott Richards
Real Estate Investor · Chicago Heights, IL · Member since 2014 · 5 posts · 5 votes
12y
Pardon my ignorance, but should I be looking for foreclosed or auction properties that fit within the 30k price point? I say this because that's all I seem to find online. I'd imagine that a 30k price by a normal seller could be either highly motivated or the property could require some TLC.
3 Reply
Chris K.Pro Member
Investor · Baltimore, MD · Member since 2012 · 1k+ posts · 655 votes
12y
Originally posted by @Scott Richards:
Pardon my ignorance, but should I be looking for foreclosed or auction properties that fit within the 30k price point? I say this because that's all I seem to find online. I'd imagine that a 30k price by a normal seller could be either highly motivated or the property could require some TLC.

You're absolutely right. But theres nothing wrong with a motivated seller or one needing TLC as most of them will need some love.
1 Reply
Levi F.
Real Estate Investor · soldotna, AK · Member since 2011 · 69 posts · 36 votes
12y
Count me in too. We buy multi family in the 20-60k range depending on condition and location. Some initial upgrades are the norm even with "turnkey" properties. We are currently converting some of our unit to section 8. ROI is outstanding.
7 Reply
Richard F.
Real Estate Investor · Henderson, NV · Member since 2011 · 87 posts · 22 votes
12y
Several years ago I purchased properties in this price range in the "hood" of Indianapolis. All I can say is: the hood changes block to block, you'll need a good property management company to get that half-way decent tenant in there and you may have to wait a while for that to happen, you deal with higher turnover, vacancy, maintenance, and evictions. But if you get the right combination it can be a nice cash-flowing machine. :)
3 Reply
Jerry W.Pro Member
Moderator
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
12y
I am aiming for this market ATM I will follow this thread and maybe we can help each other out some. I have an accepted offer an a under $30K property I plan to close on next week.
3 Reply
Pyrrha Rivers
Investor · Yokosuka, Japan · Member since 2014 · 631 posts · 184 votes
12y
Thank you @Matt R. for starting the discussion!

I feel encouraged to stick with my goal even if it takes time. The time between now and my first purchase will be time I spend educating myself here with these great discussions.
2 Reply
Douglas B.
OP
Buffalo, NY · Member since 2014 · 82 posts · 75 votes
12y
alright folks, thanks for the replies! I'll start trying to add those who wanted to network as colleagues here on BP. I'd like to throw out a new pertinent topic of discussion every few days and we can riff on it for a while and share ideas and learn from each other. I'll continue to monitor this thread and add people who trickle in later.

If you're interested, another way to join this network is to follow me here on BP.

I'm excited to get this going. Welcome everyone!
6 Reply
Douglas B.
OP
Buffalo, NY · Member since 2014 · 82 posts · 75 votes
12y
I'm having trouble inviting you all as colleagues. I've sent numerous requests but now it's giving me warnings about spam messages. From this point on, if anyone wants to join our little network group, either follow me or invite me to be a colleague and just put "sub 30k" as the message.
7 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Since we all are spread out there will be different rules for each area.

For example:

Some older cities will be block by block

Some other cities will be hood by hood

I am investing in an area where there are 4 basic sections of the city.

I can avoid the one bad section all together.

Perhaps, there are some borderlining blocks surrounding the bad area I might entertain if I am priced out of the better areas.
0 Reply
Ben Skove
Cincinnati, OH · Member since 2013 · 292 posts · 81 votes
12y
I invest in this price range. I agree with the general sentiment - it's a block by block game, and patience is the key.

@Douglas B. , you might want to listen to @Al Williamson's podcasts and read his posts about improving the neighborhood around these properties.
3 Reply
Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
@Douglas B.

Hi Douglas,

Our group specializes in properties in the price ranges you mentioned and we have been involved in over 100 transactions in the past year and a half.

Properties in C class and B class areas can bought in that price range it will just be dependent on the city.

Please feel free to connect as I would be happy to bounce ideas with like minded investors.

Thanks and have a great day.
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