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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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Originally posted by @Engelo Rumora:
@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.

Awesome Enegelo. Can you give us an example of your recent 30k purchase?

Where?

How much all in?

Type of Hood and description?

Type of House and condition?

What repairs and how much?

Rents and tenant quality?

Tenant income?

School ratings?

Demograhic make up?

And any other useable details would be greatly appreciated.

Thanks for your input!
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
Originally posted by @Matt R.:

Originally posted by @Engelo Rumora:
@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.

Awesome Enegelo. Can you give us an example of your recent 30k purchase?

Where?

Kansas City MO

How much all in?

$25,000 - $30,000

Type of Hood and description?

C + area, inner city South of 50th street as its much more desirable than North of the creek. Much less crime also.

Type of House and condition?

1920s 2 bed, 1 bath. Needed to be re-wired, plumbing, kitchen was decent just sanded back and painted gloss. Complete bathroom overhaul, internal paint, floor covering, new blinds, light fittings, new furnace, new hot water. Roof was decent and needed no work.

What repairs and how much?

Approx $15,000 in repairs. If we pay more for a property it means it needs less work and vice versa

Rents and tenant quality?

$500pm for 2 bed and $600 - $650pm for 3 bed in same area. Tenants are lower income earners.

Tenant income?

Do not know these statistics.

School ratings?

Do not know these statistics.

Demograhic make up?

Do not know these statistics.

And any other useable details would be greatly appreciated.

Thanks for your input!

Hi Matt,

Please see my answers above.

Thanks and have a great day.
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Originally posted by @Engelo Rumora:

Originally posted by @Matt R.:

Originally posted by @Engelo Rumora:
@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.

Awesome Enegelo. Can you give us an example of your recent 30k purchase?

Where?

Kansas City MO

How much all in?

$25,000 - $30,000

Type of Hood and description?

C + area, inner city South of 50th street as its much more desirable than North of the creek. Much less crime also.

Type of House and condition?

1920s 2 bed, 1 bath. Needed to be re-wired, plumbing, kitchen was decent just sanded back and painted gloss. Complete bathroom overhaul, internal paint, floor covering, new blinds, light fittings, new furnace, new hot water. Roof was decent and needed no work.

What repairs and how much?

Approx $15,000 in repairs.

Awesome, thanks. I will do a helicopter fly over.

I will assume the schools are bottom barrel .

Are you certain this is a c+ hood?

On surface level so far it appears less than C+.

What are your plans with this purchase?

Thanks again,

Matt

0 Reply
Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Thanks Engelo,

what is the tax rate?

What is arv?

Do you use PM?

Thanks,

Matt
0 Reply
Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
Hi Matt,

"Awesome, thanks. I will do a helicopter fly over." lol

You will do a helicopter fly over? lollol

Thanks and all the best with your investing
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Originally posted by @Engelo Rumora:
Hi Matt,

"Awesome, thanks. I will do a helicopter fly over." lol

You will do a helicopter fly over? lollol

Thanks and all the best with your investing

yes, via google maps;)
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
12y
engelo

You know my stance.. But this is what I have been telling the Aussies for 4 years now.... If you live in the area and can be hands on these houses will work fine.. But if you live across the pond the management of them will eat you alive.. Plane and simple ... Same with inventors that live out of state.

And the only market for them is other cash flow investors that want to get the same deal you did.. If one has the cash and wants an annuity type income that works.. But from my end loaning money is much much easier and at the end of the day you will make more almost guaranteed.. Let someone else have the TTT's I know that's against conventional thinking here. But I just sold my portfolio in Oct. I had 350 of these babies and am glad to part with them.. I am collecting a few a month again but very very selectively.

Engelo have you let your brothers and sisters in OZ know about this site..?
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
Originally posted by @Matt R.:

Originally posted by @Engelo Rumora:
Hi Matt,
"Awesome, thanks. I will do a helicopter fly over." lol

You will do a helicopter fly over? lollol

Thanks and all the best with your investing

yes, via google maps;)

LOL

Sorry,

I was sensing sarcasm and am not the type to get into banter over the forum.

Below are replies to your most recent questions:

The tax rates are quite low on the Missouri side. On average around $350pa

Kansas City, Kansas has a higher tax.

I believe the ARV would be around $30,000. Its difficult to get an accurate ARV as I have seen houses sell for $5,000 and then other across the road sell for $80,000 to unsuspecting foreign investors. Also, what a local would pay for a turn key house is completely different to what someone out of state would pay for the same property.

In these areas property management is the KEY to being successful.

With good property management in place the monthly rents can be collected and the numbers on "paper" can also be achievable in real life.

Thanks and feel free to ask further questions.
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
Originally posted by @Jay Hinrichs:
engelo

You know my stance.. But this is what I have been telling the Aussies for 4 years now.... If you live in the area and can be hands on these houses will work fine.. But if you live across the pond the management of them will eat you alive.. Plane and simple ... Same with inventors that live out of state.

And the only market for them is other cash flow investors that want to get the same deal you did.. If one has the cash and wants an annuity type income that works.. But from my end loaning money is much much easier and at the end of the day you will make more almost guaranteed.. Let someone else have the TTT's I know that's against conventional thinking here. But I just sold my portfolio in Oct. I had 350 of these babies and am glad to part with them.. I am collecting a few a month again but very very selectively.

Engelo have you let your brothers and sisters in OZ know about this site..?

Thanks Jay,

I remember you mentioning a a while back that the only way to make it work is being hands on and on the ground. There are too many horror stories that I hear on a regular basis. I am just in the process of assisting Rosa Tang that got screwed by Precise Property Management that were based here in KC. I actually heard they were on the news a couple of days ago for stealing 3 months rent from investors and fleeing town. Unbelievable.

Looking at diversifying into higher class property. The further South one goes here in KC the better the area gets and more owner occupied. Also, seeing some great opportunity in Ohio.

I will start a topic in the OZ forum and see if anyone wants to join. They would get some great knowledge from Bigger Pockets about the US market hehe.

Thanks for reading
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Originally posted by @Engelo Rumora:
Thanks!
"Yes, you can heli fly over on google maps!

1 Reply
Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
@Matt R.

Hey Matt,

Whats your area of focus?

Thanks
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Ramon Jenkins
Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
12y
I have investor clients at all price ranges for purchase.

Smallest deal done so far was $3400

and it's near local Marquette University :)

- Milwaukee city owned

- It was not in a war zone area also.

Thanks @Douglas B.

1 Reply
Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
@Ramon Jenkins

Great price

How much in rehab? Rent?

Thanks
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Ramon Jenkins
Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
12y
@Engelo Rumora city estimated $16,000 for need repairs.

My client and I believe for him around $10,000.

He going the section 8 route I believe.

Possible rent middle six hundred ( low estimate ).

Client thinking of also: lease to own

He is estimating about $50,000 - $68,000 minimum

return on his money over next decade.
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
@Ramon Jenkins

Its a no brainer.

Great numbers :)
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David Lee
Wholesaler · Lenoir, NC · Member since 2013 · 297 posts · 127 votes
12y
I have seen that a lot of you guys post that some of the properties are in the hood. Not all properties under 30,000 have to be in the hood. One of the most recent houses that I have purchased is within a half a mile of a big search engine. Some of you may know what it's called Google. It's not in the hood the house just needed work. That's what I look for when I'm purchasing these homes. I look for homes that need work and most people aren't willing to do. Allio them Lenoir North Carolina it used to be called the furniture capital of the world, in the last 10 years the furniture factories have almost completely went out of business. I think my area is starting to come back up for example we had Google to move in a couple of years ago.
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
Originally posted by @David Lee:
I have seen that a lot of you guys post that some of the properties are in the hood. Not all properties under 30,000 have to be in the hood. One of the most recent houses that I have purchased is within a half a mile of a big search engine. Some of you may know what it's called Google. It's not in the hood the house just needed work. That's what I look for when I'm purchasing these homes. I look for homes that need work and most people aren't willing to do. Allio them Lenoir North Carolina it used to be called the furniture capital of the world, in the last 10 years the furniture factories have almost completely went out of business. I think my area is starting to come back up for example we had Google to move in a couple of years ago.

Agreed @David Lee

I know of numerous areas in Kansas City and Ohio that you can buy in decent areas for around $30,000.

If you have the "leave no stone unturned" approach when shopping for property eventually great deals will come up.

Thanks
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David Lee
Wholesaler · Lenoir, NC · Member since 2013 · 297 posts · 127 votes
12y
@Engelo Rumora

I think it is like shopping for anything else. If you keep looking you can find what you are looking for a cheaper price.
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Sharad M.Pro Member
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
12y
It's important to network as much as you can. Tell as many people as you can that you are in the market looking for properties. You never know where a deal will come from.

I have had my contractors bring me deals that were not listed and some of the deals have worked out great.
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
Originally posted by @Sharad M.:
It's important to network as much as you can. Tell as many people as you can that you are in the market looking for properties. You never know where a deal will come from.

I have had my contractors bring me deals that were not listed and some of the deals have worked out great.

Agreed.

We also found come awesome deals on Craigslist hehe

Need to be on that thing all the time tho.

Thanks
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Sharad M.Pro Member
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
12y
Originally posted by @Engelo Rumora:

Originally posted by @Sharad M.:
It's important to network as much as you can. Tell as many people as you can that you are in the market looking for properties. You never know where a deal will come from.
I have had my contractors bring me deals that were not listed and some of the deals have worked out great.

Agreed.

We also found come awesome deals on Craigslist hehe

Need to be on that thing all the time tho.

Thanks

Agreed. Do as much marketing as possible. I picked up a house couple of years ago for $10k, put $10k into in and it's been rented for $825 per month.
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
12y
Originally posted by @Sharad M.:

Originally posted by @Engelo Rumora:

Originally posted by @Sharad M.:
It's important to network as much as you can. Tell as many people as you can that you are in the market looking for properties. You never know where a deal will come from.
I have had my contractors bring me deals that were not listed and some of the deals have worked out great.

Agreed.

We also found come awesome deals on Craigslist hehe

Need to be on that thing all the time tho.

Thanks

Agreed. Do as much marketing as possible. I picked up a house couple of years ago for $10k, put $10k into in and it's been rented for $825 per month.

Great numbers

The deals are definitely out there.
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Matt R.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
12y
Originally posted by @Engelo Rumora:
@Matt R.

Hey Matt,

Whats your area of focus?

Thanks

Currently focused on sfh in Colorado Springs and surrounding. But I am open to investigating all areas. I am looking primarily at demographic trends to determain buy and hold possibilities. I do test marketing as well.

Thanks,

Matt
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Steven J.
Urbana, IL · Member since 2012 · 1k+ posts · 425 votes
12y
This is a great topic. I'll be glad to follow.

How many of your are in smaller towns/rural areas? Are these just cheaper neighborhoods that are part of a city? In surrounding towns there are homes that are often in this price range but being smaller its hard to anticipate possible rent and/or resale value.

As another suggestion for the 30k and under stuff listen to the podcast with @Dawn Anastasi regarding how she gets her financing for purchase and repairs. I anticipate using that startegy at some point.
3 Reply
Austin S.
Stoneham, CO · Member since 2012 · 52 posts · 5 votes
12y
@Douglas B. I am by far not a specialist. My first buy and hold was April 2013 that I purchased for $32,300. It was a HUD property. I put $12k into it so I was right around the $44k mark. Rented it in no time for $700 per month. Closing on another property this coming week for $36,600 that doesn't need any work before a tenant can move in (eventually will replace roof this spring or summer) and it will rent for $600 per month. I am in a small market in a town of about 15k people but the rent to purchase ratios can be pretty decent if you look hard and long enough.
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