Anyone out there specializing in under 30k properties?

Innovative Strategies
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Anyone out there specializing in under 30k properties?

Douglas B.
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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  • Richelle T.
    Rental Property Investor · Columbus, OH · Member since 2014 · 340 posts · 111 votes
    11y

    @Pyrrha Rivers Do keep us posted on what you find. I'm interested

    0Reply
  • Pyrrha Rivers
    Investor · Yokosuka, Japan · Member since 2014 · 631 posts · 184 votes
    11y

    @Richelle T. I will certainly will and hopefully someone else has checked them out and has something to share already.

    0Reply
  • Priti Donnelly
    Kitchener-Waterloo, Ontario · Member since 2015 · 85 posts · 28 votes
    11y

    @Pyrrha Rivers

    Thanks for your response. While we do have clients in the Bigger Pockets community, I'm not sure how active they are publicly. If you'd like to speak to someone who has worked with us, we’re more than happy to provide client references, as well as legal and financial credentials.

    Regarding tours, our executive APAC team can certainly show you around. Tours are more of an introduction to the country to become familiar with the property market and its potential, rather than a sales tour. It is not intended for purchases, but to help with more informed decisions.

    I hope that this information is helpful. If you have any other questions, do let me know.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Priti Donnelly

      is this Ziv Magen's company... I have followed him for years on the Property investing forum in AU... he had some pretty good discourse with a few fellow Aussies.

    I don't know how many US investors would feel comfortable about over seas investing.. I know a lot buy in Mexico and middle America.

    If it is Ziv   please tell him that Jay Hinrichs say hello I have not spoken to him in a few years.

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  • Teresa F.
    Residential Real Estate Broker · Clinton, MD · Member since 2008 · 297 posts · 178 votes
    11y

    Lots of interest --  group started yet?  Count me in.  Under 30 is very difficult in my neighborhood (DC Metro) but I get as close as I can.  Last purchase a one bedroom condo for $28k -- no rehab needed.  Rented for $1100 p/m.  Love this price point -- allows me to use a credit card.  

    1Reply
  • Priti Donnelly
    Kitchener-Waterloo, Ontario · Member since 2015 · 85 posts · 28 votes
    11y

    @Jay Hinrichs

    It certainly is Ziv Nakajima-Magen's company. I will be sure to pass on your message. Nice to meet you!

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Priti Donnelly

      cool thanks.. .I really liked his model and the Japenese tenant.. if I was looking for 10% return were appreciation was only icing on the cake.. I would take a trip there and check it out... because having a few Japanese partners like I do.. I understand the culture a little more than the average US citizen and I fully understand the difference between a US tenant in that asset class and a Japanese tenant in that asset class.. the two could not be more polar opposite.  LOL..

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  • Derrick Jordan
    Real Estate Consultant · Atlanta, GA · Member since 2012 · 43 posts · 21 votes
    11y
    Originally posted by @RJ Cox:

    @Pyrrha Rivers - your strategy  can work in DeKalb County, Georgia. I have sold many houses in that area. The caveat is the fact that you're distant. While I offer my clients plenty of photos and even video of the property, nothing beats getting your own eyes and ears on a property and neighborhood (trust but verify; just because I think it's a good deal for you doesn't mean that you share my opinion - and it's YOUR money at work). 

    Maybe you can set up a mini-vacation where you can take a tour of some target areas with an agent. Some 30k properties are in decent working-class neighborhoods and others you will prefer to keep driving past ... the comps and Google street view don't tell the whole story.

     Are you doing work in DeKalb

    0Reply
  • Edward Briley
    None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
    11y

    The only way I would consider investing with a group of investors is to be a guaranteed amount of money in, and a guaranteed amount of money out within a certain time frame.  I am not a person on "maybe or could be", when it comes to money.  I work hard for my money, and I had rather do flips myself.  The only variable would be is that I get a contractor to give wholesale labor to me and negotiate a split of the profit on the property when it is sold.  And @Derrick Jordan I eyeball and walk every property before I would even consider making an offer.  My offers always include a termite and home inspection at my expense to be performed, and have them completed before placing a contract on the property.   Matter of fact I am driving 150 miles tomorrow to view a property I may be interested in. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Edward Briley

      you do inspections and termite before you put them under contract ?  how do you do that.. as a seller and I sell A LOT of property each year... I would never let you do that.

    Get into contract proof up and then do your due diligence.. I don't want to waste my time with a maybe buyer

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  • Edward Briley
    None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
    11y
    Originally posted by @Jay Hinrichs:

    @Edward Briley

      you do inspections and termite before you put them under contract ?  how do you do that.. as a seller and I sell A LOT of property each year... I would never let you do that.

    Get into contract proof up and then do your due diligence.. I don't want to waste my time with a maybe buyer

    Basically an offer is a contract. Of course I have to put down an EMD, however, it gives me a way out if I don't like what is found. I have had banks to give me two weeks to have them done, and I have had banks to give me three days. If they do not allow it, I move on. I do not buy homes at auctions. I only buy REO.

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  • Edward Briley
    None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
    11y
    Originally posted by @Jay Hinrichs:

    @Edward Briley

      you do inspections and termite before you put them under contract ?  how do you do that.. as a seller and I sell A LOT of property each year... I would never let you do that.

    Get into contract proof up and then do your due diligence.. I don't want to waste my time with a maybe buyer

     Here I am sure throughout the United States you can sell a home legally if you do not allow inspections on a home.  (Unless it is an auction buy).  The only way to get around in doing that is selling the home for land value only.  - And I am not even sure of that.  If you do not allow for the purchaser to be able to get an inspection on a home, before they finalize the contract, you may even open yourself up to law suits.  I know here, and I am sure throughout the United States, that when a contract is signed, and a purchaser agrees to buy a home, they have 24 hours to get out of the contract, and there are longer times on Condos, and Timeshares. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Edward Briley

      your original post made it sound like you do inspections PRIOR to even writing a contract.

    that was what I was responding to.. that as a Seller unless we have a contract in writing and you have Proofed your funds.. I am not giving you permission to do a home inspection and termite inspection.

    Of course inspection prior to buying are critical for any investor and I fully support that.

    And it really depends on the buyer.. and where your at.. Many of the deals we do .. we do not get inspections as we know we are going to rehab it to rental standards and it is what it is... Most defects in those rental type homes can be seem in your first walk through..

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  • Ziv Magen
    Fukuoka, Fukuoka · Member since 2012 · 148 posts · 29 votes
    11y

    @Jay Hinrichs, long time indeed, how have you been, buddy? :) sorry for disappearing, don't have much time to chat online these days, as we've been super busy - the economic recovery here has done wonders for foreign interest in the country, and with us being one of the only companies covering the entire country with a single point of contact solution at all entry levels (and in English!), we've had our hands quite full. Besides, Priti does a way better job then I ever could, being so much more polite and to the point than I am ;) here's a recent piece about it - http://asianpropertyreview.com/the-sun-rises-again...

    Love the new website, well done - excellent idea, and much needed, I'm sure, particularly in the USA, and you've certainly got the reputation and the experience to do the job. Never ceases to amaze me and, coming from a polar opposite as far as the tenants and business environments go, more than a bit scary lol :) personally, Chikako and I have still only got the one US investment to this day, the one you hooked us up with. 

    We do have more than a few US and Canada clients these days, however - they seem to be more open minded than they were in previous years, at least as far as Asia is concerned, and Japan is Asia Pacific's biggest investment market, second only to the USA globally - it was just a matter of time before they got over the cultural fear and realised what a cashflow heaven the place is...

    Good to hear from you man, let's make a point to catch up soon!

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Ziv Magen

      same here Ziv,,, I do miss the spirited debates you and Freckle used to have..

    those type of interactions are not common on BP and probably would get thrown out by the Mods...

    the PI forum just died a slow death.. not sure what happened at least as it related to foreign investments.. I certainly wish I would have thought up the new website about 5 years ago when I first started sharing my experience's with Aussies I think we could have saved many from the Spruiekers they ended up with.

    Best  and I will drop you  a personal e mail as well.

    JLH

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  • Pyrrha Rivers
    Investor · Yokosuka, Japan · Member since 2014 · 631 posts · 184 votes
    11y

    @Derrick Jordan and

    @RJ Cox I am currently in town, working on a property in DeKalb County.

    0Reply
  • Pyrrha Rivers
    Investor · Yokosuka, Japan · Member since 2014 · 631 posts · 184 votes
    11y

    @Priti Donnelly Thank you for your response. I would love to have references I can contact and learn what their experience has been like. I plan to follow up further once I return to Japan but knowing what some of your clients have experienced will be quite helpful. Please PM me.

    Thanks 

    0Reply
  • Margaret Boone
    Houston, TX · Member since 2015 · 4 posts · 2 votes
    11y

    Douglas B. 

    Count me in.  I am new to  RE, however, I feel now is the time.

    Margaret

    0Reply
  • Margaret Boone
    Houston, TX · Member since 2015 · 4 posts · 2 votes
    11y

    Lisa P.

    Your information is Awesome!!!!!!

    1Reply
  • Kara Haney
    Investor · new york, NJ · Member since 2014 · 137 posts · 13 votes
    11y

    that is real interesting Bob - "it's hard to find financing for amounts less than $50k"

    I dont know much about financing - if a property is in a lower income area why is that hard? why is it hard anywhere?

    tia

    0Reply
  • Adrian Chu
    Real Estate Broker · Seattle, WA · Member since 2014 · 1k+ posts · 427 votes
    11y
    Originally posted by @Matt R.:
    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!

    Yes, definitely true, especially the roof/hvac part!

    1Reply
  • Lisa Phillips
    Real Estate Investor · Arlington, VA · Member since 2012 · 300 posts · 277 votes
    11y

    @Margaret Boone

     Thanks!!

    @Kara Haney  It really is just based on that institutions policy. I am about 50/50 on banks/credit unions (although I have a higher hit rate with small banks and credit unions) on whether they will finance a deal this low. I am a BIG fan now of personal loans. Why? It takes 3 hrs, a couple of pay stubs, 5-7 year loans at 10-13% interest rates- yes, that's high, but A.) since i can't get a conventional mortgage, it works in this price range and B.) I am able to refinance (or consolidate) with another loan every 1-2 years, which significantly lowers the payments and extends the term. I just cleared up ~350/month off 3 different loan products (2 personal, 1 vehicle refinance). I go into detail on my latest newsletter issue if you want more info. 

    Love this thread! The proof is in the pudding.

    1Reply
  • Kara Haney
    Investor · new york, NJ · Member since 2014 · 137 posts · 13 votes
    11y

    13% - you are a brave woman Lisa!

    GL

    klh

    1Reply
  • Edward Briley
    None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
    11y

    Investing in sub 30k homes should be the best investment at present in my opinion.  Now saying this I know many will cost no less than $50,000 to flip properly.  However, some may be acquired that may just need a little paint to rent, or maybe just HVAC and a roof.   And some of these may be worth to get in what some are calling "War Zones".  Now that many of you are sitting on mortgages at 4.5% or below it may not be out of your way to considering beefing up your own property to sell within the next year or so.   There are many reasons I am saying this, in which many of you may realize, even if you happen to be at the high point of your life.   We know the economy could be much better for the middle class and the poor.   We also know that the Federal Reserve has kept interest rates too low for the last few years now.  I am someone that can see real estate really booming within the next two years, providing you can get it now and holding it for the next two years or so.   This even includes that a major economic collapse would happen.  We also know that banks will sit on homes for two years or more that have went into foreclosure.  I see an increase of investment companies buying up large lots of homes in part of the country as well, and reselling these properties at bargain prices, without touching them, and making a decent profit on these properties.   Is it time to buy sub 30k properties?  I think that time is rapidly passing that it can be done.  The reasons are simple. Salaries will have to increase to keep up with interest rate increases when it happens.   I can see real estate booming in the very near future, and all people need shelter, food and water no matter what would happen.  I can see a  post just like this one with the title of "Anyone out there specializing in properties under 300k".  Where are you going to be?  The way the market is doing today in real estate should be telling you now to buy, buy , buy!!!  Matter of fact it is telling you to buy low now, and sell high later while making a profit in between. 

    2Reply
  • Edward Briley
    None · Virginia Beach, VA · Member since 2014 · 126 posts · 50 votes
    11y

    I want to add, that this morning I just looked at one of the clearing houses the federal government has that there are over 300 properties that can be acquired for 30k or less throughout the country, and if you increase those values that this one agency has, around 1400 homes can be acquired for less than $100,000 - some of these homes are turn key in very nice communities.   I saw a home for sale with around 2 acres of land to sell for $100 on that same site less than one month ago. 

    1Reply
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