What Makes a "Sub$30k" House?

What Makes a "Sub$30k" House?

Real Estate Investor · Pensacola, FL · Member since 2012 · 136 posts · 83 votes

I've started a new "Sub$30k" thread in an effort to step away from the chaos that has become a few of the other threads. While I've reviewed most of the opinions contained in their respective comments sections, I'd like to publicly tell everyone my experience, why I feel how I do, and present you finally with a question: "What makes a "Sub$30k" house?

I first started in real estate in 2005 at 23 years old with a $100,000 home purchase. My agent assured me this would be a sound investment and that it would grow over time. I'd read a lot, done what I considered to be a large amount of analysis, had a degree in business, and figured I should plug my nose and jump. 

This is the approach that many BP users have advocated for newbies: Buy a more expensive property/cash flow is your enemy/look to appreciation/cheap houses=anathema. Since 2005, that $100k house has been my biggest, most constant headache. The construction quality is awful. Like many other recent builds, this one was thrown together. It needed a new roof after only 9 years. It has had many, many problems. A friend of mine purchased a house in Texas that was recent construction that already has foundation issues 10 years later, while a few of my houses that are older than my grandmother are structurally very sound due to what I consider a higher-quality standard in terms of craftsmanship and also better materials.

As a person first starting out, this experience was absolutely devastating. It felt like every other month I was on the hook for a new major repair, a tenant was threatening to move out because of some problem, and I still had a huge mortgage to contend with. I almost gave up investing and sold it off at a steep loss. That is also what EVERYONE around me said to do. Cut your losses, move on, real estate investment isn't for you. Everyone gets out of it. There is no money to be made with rentals. I began to second guess everything I'd read/done and felt defeated, looking at my bleeding balance sheet. Did I just have bad luck? Was there really no money to be made? What could I have done to avoid this?

But what if I'd invested in a "Sub30k" house as my first? What if I'd had heavy cash flow in a solid working class neighborhood? My property manager/agent of course did not want that. No one wants to manage a house that doesn't bring in a large monthly rent. No one wants to sell a $30k house and collect a paltry 3%. 

In my opinion what you have are a lot of salesmen here who push a product. They understand the commission side. If I were selling turnkey properties, I'd be on here telling everyone to let me solve your problems. Let me do all the dirty work and put in the elbow grease. Hand over the lion's share of your profits and I'll gladly make money with your money.

I've since gravitated toward "Sub$30k" houses like this one (Paid $25,000 and did $3,000 in renovation): 

What a dump, right? The eaves needed to be painted, it needed some other work, so what? It has rented for $750-775 every month since I bought it and it always rents the first day it becomes vacant. Property taxes and insurance are a combined $80 a month. 

I WISH I'd started with this house as my first. I wouldn't have become so gun-shy and waited 3 years to make a subsequent purchase. I'd have been in the market when things were cheaper and my portfolio would be much more impressive now. I'd have developed better skills. I'd have understood that with a portfolio of cash-churners, you can absorb operating costs a lot better much sooner. <--I consider this to be one of the most important lessons to be learned in REI.

By the way, I could sell this "junker" for $70k now and I did not buy it at the bottom of the investment cycle. I put sweat equity into it. I refinished the hardwood floors and Art Deco woodwork. Does that make this a "Sub 30k piece of garbage" or did I merely pay sub $30k for a $70k property? How can we really paint all properties with the same brush and say simply because you pay less than $30k it is a bad investment? 

What if someone sold you a Corvette for $5? Would you sell it to me for $10 to double your money? Is it a $5 car? 

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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
11y

I'd rather buy a $30k house than a $100k house because I've just saved $70k.  If the $100k house only needs $10k of repairs over the lifetime of owning it, but the $30k house needs 3x that amount, but I can get the same rent, I'm actually ahead financially with the $30k house.

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  • Real Estate Investor · Pensacola, FL · Member since 2012 · 136 posts · 83 votes
    11y

    @Jay Hinrichs No plans whatsoever. I have a lot of respect for Bill from reading his posts over the years and I was trying to politely respond which was apparently taken as me having an agenda. I have no such agenda. 

  • Real Estate Investor · Pensacola, FL · Member since 2012 · 136 posts · 83 votes
    11y

    @Jay Hinrichs That's a great point you make about refinancing and cashing out assets. I had never realized that cost basis is reset to market value at the time of your death for your heirs until I read one of John T. Reed's books. Great things to keep in mind in terms of estate planning. 

  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    11y

    Jay, that's not really the case in South MO or North AR, not in SE KS either, now, get to KC or St. Louis and that changes. Cali is simply another world, other than the movie star mentality from the 50s, I have no idea why the market there is so skewed, other than geographical constraints with a heavy population.

    Ben, not really sure what you were saying there as to my comments, I don't recall speaking to any of your materials.

    I don't care for turn key stuff generally, especially long distance because an investor can easily end up paying 70K for a 25K property with lipstick and some cousin of the seller as a tenant that will be moving out after a few payments. Without good boots on the ground there is simply too much opportunity for fraud and scams, just another area where some bad actors effect those who may try to give service. :)

  • Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
    11y

    Interesting opinions on TICs.  That's my business, including DSTs, REITS, Funds, etc.

    Often, it seems, people will bash syndications because they are illiquid.  Usually, liquidity events are at about 5-7 years of ownership.  Unless you're flipping, most folks will hold investment real estate for 5-7 years or longer, so I don't see the hold period as any sort of obstacle.  Neither do my clients.

    TICs did get slammed in the Great Recession, however, everything got slammed.  Office down 50%, Hospitality down 75%, single family down 30-40%.  TICs and DSTs aren't immune to the market!  It's simply a legal structure that allows investors to participate in institutional real estate for as lttle as $25,000. Any appreciation is the investors.  They often experience a much higher tax shelter through depreciation.  Debt is paid down through accelerated amortization schedules, adding to overall return.

    Many investors have held wholly owned investment property for decades.  They have hundreds of thousands or millions in the ground getting them a 1-3% return after all expenses (and, incidentally, few investors include ALL expenses in their analysis of return).  They are likely sick of managing their property, want a "hands off" investment experience and potentially higher cash flows for retirement.  I don't see whats wrong with that equation.  Syndicated real estate provides many, many benefits to these folks. 

    Investors don't all have the same goals for their investments.  The various alternatives available in real estate Investing each offer unique features and benefits to fit individual needs and goals.

  • Real Estate Investor · Pensacola, FL · Member since 2012 · 136 posts · 83 votes
    11y

    @Leslie Pappas 

    Thanks for sharing this perspective. My aunt invested in a medical park TIC and was able to liquidate without incident after 3 years. It was effortless and a great ROI in my opinion for the most passive income you can get.

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

    @Leslie Pappas 

      ITs just a matter of what you like and don't when I lived in PA  I worked for a syndicator in San Mateo and it all worked great until it did not.. their first down fall was going for apartments in Texas they lost the properties and the investors got hammered of course.

    Then there was Ken Harter up here in Oregon the largest bankruptcy in the state at the time and of course investor got hammered...

    I think the biggest difference with DO it your self and pooled is you can get sucked into the issues of the promoter or GP  and be forced into liquidation as opposed to owning the asset yourself and riding out the storm..

    But I see crowdfunding as the new syndicators on the block that's in essence what they are doing not sure how they do this and what responsibility they have to the investors as opposed to those in the traditional pooled investment field.

    But as you probably agree these deals are only as good as the General Partner.. a bad GP can fubar a perfectly good investment and a great GP can turn a mediocre one around.

  • Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
    11y
    Originally posted by @Ben Stout:

    @Leslie Pappas 

    Thanks for sharing this perspective. My aunt invested in a medical park TIC and was able to liquidate without incident after 3 years. It was effortless and a great ROI in my opinion for the most passive income you can get.

     It's great she did well with the investment.  Medical Office is a good niche, as doctors really put a lot of money into building out their suites, and therefore tend to be long term, dependable leases

  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    11y
    Originally posted by @Ben Stout:

    @Jay Hinrichs No plans whatsoever. I have a lot of respect for Bill from reading his posts over the years and I was trying to politely respond which was apparently taken as me having an agenda. I have no such agenda. 

    Not really Ben, having an agenda isn't a bad thing if you did have an underlying goal, my impression comes from initial posts as I "frame" the topic. If this had anything to do with my comments.... 

    Don't know how we took a hard right getting off topic on TIC's but whatever.... :)

  • Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
    11y
    Originally posted by @Jay Hinrichs:

    @Leslie Pappas 

      ITs just a matter of what you like and don't when I lived in PA  I worked for a syndicator in San Mateo and it all worked great until it did not.. their first down fall was going for apartments in Texas they lost the properties and the investors got hammered of course.

    Then there was Ken Harter up here in Oregon the largest bankruptcy in the state at the time and of course investor got hammered...

    I think the biggest difference with DO it your self and pooled is you can get sucked into the issues of the promoter or GP  and be forced into liquidation as opposed to owning the asset yourself and riding out the storm..

    But I see crowdfunding as the new syndicators on the block that's in essence what they are doing not sure how they do this and what responsibility they have to the investors as opposed to those in the traditional pooled investment field.

    But as you probably agree these deals are only as good as the General Partner.. a bad GP can fubar a perfectly good investment and a great GP can turn a mediocre one around.

    Yes, there are good and bad properties, good and bad sponsors and good and bad markets.  Thorough and extensive due diligence is key, but things can still go sideways.

    Of the 120 or so properties that I've helped my clients with, some experienced less than projected returns, and some did just fine.  In the case of the sponsors I chose to work with, the great recession caused some properties to go sideways or under, not the sponsors lack of skill or disinterest in the plight of their investors.

  • Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    11y

    Bill, Cali might be a more normal market if there was not every Tom Dick and Harry from the entire planet trying to buy here. I forget the stats but it might be close to 20% are foriegn all cash buyers. Same for London, NYC, SF etc....to add even more pressure those 20% are buy and hold forever mind set folks. So you get a 20% extra demand that takes 20% of property off market forever. That definitely helps create the perfect storm for appreciation.

    I think one issue is once you get a 30k to go up quick to 60k 70k....it flat lines after that. As an investor looking to maximize IRR, one would typically sell that asset rather than wait for a trickle of returns. That's according to the Ivy league MBAs. This is close to the hybrid buy hold flip model. Thoughts?

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

    @Leslie Pappas 

      I just look at Opus development.. talk about a great company pre GFC  and then bust.

    I think if your doing your deals in your market you insulated somewhat  to the down turn or catastrophic down turns as we saw... its risk reward for sure.  and asset class.

    for pooled investments I like Class A mobile home parks in CA or WEst coast.. they are no brainers... and your larger NNN deals.

  • Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    11y

    Totally agree with

    @Jay Hinrichs . A $30k SFR is $30k for a reason - it's called the market. You can't force appreciation against the market, nor ca you afford to do a proper rehab. You can't do kitchen cabinets, baths, wiring, plumbing, etc. All you have in the end, is a pig - congratulations! :) The CF may be there, but the management will contribute to your ulcer or two, and CapEx will eat you alive over 10 years; and the value will never go anywhere...

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

    @Ben Leybovich 

      I disagree about your assessment on rehab.. you simply are buying these 30k houses as is for 5k then putting 25k into them... I see this all the time...

    but if your paying 30k for them as is and they still need rehab.. then your 750 rent asset to be a true asset for long term hold will need the 25k in rehab and its a 55k asset not a 30k

    Locals could manage this but out of state no way they would get killed over time as you describe...

  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    11y
    Originally posted by @Ben Stout:

    I've started a new "Sub$30k" thread in an effort to step away from the chaos that has become a few of the other threads. While I've reviewed most of the opinions contained in their respective comments sections, I'd like to publicly tell everyone my experience, why I feel how I do, and present you finally with a question: "What makes a "Sub$30k" house?

    I first started in real estate in 2005 at 23 years old with a $100,000 home purchase. My agent assured me this would be a sound investment and that it would grow over time. I'd read a lot, done what I considered to be a large amount of analysis, had a degree in business, and figured I should plug my nose and jump. 

    This is the approach that many BP users have advocated for newbies: Buy a more expensive property/cash flow is your enemy/look to appreciation/cheap houses=anathema. Since 2005, that $100k house has been my biggest, most constant headache. The construction quality is awful. Like many other recent builds, this one was thrown together. It needed a new roof after only 9 years. It has had many, many problems. A friend of mine purchased a house in Texas that was recent construction that already has foundation issues 10 years later, while a few of my houses that are older than my grandmother are structurally very sound due to what I consider a higher-quality standard in terms of craftsmanship and also better materials.

    As a person first starting out, this experience was absolutely devastating. It felt like every other month I was on the hook for a new major repair, a tenant was threatening to move out because of some problem, and I still had a huge mortgage to contend with. I almost gave up investing and sold it off at a steep loss. That is also what EVERYONE around me said to do. Cut your losses, move on, real estate investment isn't for you. Everyone gets out of it. There is no money to be made with rentals. I began to second guess everything I'd read/done and felt defeated, looking at my bleeding balance sheet. Did I just have bad luck? Was there really no money to be made? What could I have done to avoid this?

    But what if I'd invested in a "Sub30k" house as my first? What if I'd had heavy cash flow in a solid working class neighborhood? My property manager/agent of course did not want that. No one wants to manage a house that doesn't bring in a large monthly rent. No one wants to sell a $30k house and collect a paltry 3%. 

    In my opinion what you have are a lot of salesmen here who push a product. They understand the commission side. If I were selling turnkey properties, I'd be on here telling everyone to let me solve your problems. Let me do all the dirty work and put in the elbow grease. Hand over the lion's share of your profits and I'll gladly make money with your money.

    I've since gravitated toward "Sub$30k" houses like this one (Paid $25,000 and did $3,000 in renovation): 

    What a dump, right? The eaves needed to be painted, it needed some other work, so what? It has rented for $750-775 every month since I bought it and it always rents the first day it becomes vacant. Property taxes and insurance are a combined $80 a month. 

    I WISH I'd started with this house as my first. I wouldn't have become so gun-shy and waited 3 years to make a subsequent purchase. I'd have been in the market when things were cheaper and my portfolio would be much more impressive now. I'd have developed better skills. I'd have understood that with a portfolio of cash-churners, you can absorb operating costs a lot better much sooner. <--I consider this to be one of the most important lessons to be learned in REI.

    By the way, I could sell this "junker" for $70k now and I did not buy it at the bottom of the investment cycle. I put sweat equity into it. I refinished the hardwood floors and Art Deco woodwork. Does that make this a "Sub 30k piece of garbage" or did I merely pay sub $30k for a $70k property? How can we really paint all properties with the same brush and say simply because you pay less than $30k it is a bad investment? 

    What if someone sold you a Corvette for $5? Would you sell it to me for $10 to double your money? Is it a $5 car? 

    Hi Ben,

    Great topic.

    I have never paid more than $30,000 on any one of my US investments until the first time this year.

    Still only went $4,000 over for a total of $34,000 (I am actually living in this house now lol)

    The deal you mention above show some great numbers. Well done.

    Low entry $$$ means lower risk. Everyone makes mistakes when starting and for all beginners for example its better to make one on a $30,000 property than a $300,000.

    As the saying goes, "One mans trash is another mans gold" - Never worried about other peoples opinions. I would just let those opinions mold my own decision in to a better one :)

    We have only recently started doing higher end retail flips ($100,000+) but I would take one of these cheapies any day.

    Picked one up recently for $25,000 and just waiting on contractor bids, but should come in around $20,000 - $30,000.

    Very sold area with the lot facing a golf course.

    Recent comps are between $90,000 - $120,000.

    Should walk it out the door in the mid $90,000s.

    Ohio offers some crazy deals :)

    Thanks and have a great day.

  • Real Estate Investor · Pensacola, FL · Member since 2012 · 136 posts · 83 votes
    11y

    Let me present you all with a question: 

    Thought: 12% return on notes would far exceed most investor expectations. Many of you here also invest in paper. So, with that said, if I were to give you two options, which would you choose: 

    Option 1: A portfolio of $30k properties that you could easily liquidate, for potentially more than $30k if need be, but with no assumption of appreciation, that yield a net 12% ROI and allow you to take depreciation and then 1031 exchange later.
    -or-
    Option 2: A portfolio of notes @ 12% with no tax benefit and no chance of them being worth more than a 12% yield over time. 

    Let's assume we're all in the 28% tax bracket and all living in a state with no income tax implications like Florida or Texas. 

  • Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    11y

    I'll take the notes any day of the week. The IRR when I'm done with those will be crazy higher compared to rentals. We do rentals only to depreciate income and because we don't have cash to buy notes...

  • Professional · San Francisco, CA · Member since 2014 · 876 posts · 301 votes
    11y
    Originally posted by @Jay Hinrichs:

    @Leslie Pappas 

      I just look at Opus development.. talk about a great company pre GFC  and then bust.

    I think if your doing your deals in your market you insulated somewhat  to the down turn or catastrophic down turns as we saw... its risk reward for sure.  and asset class.

    for pooled investments I like Class A mobile home parks in CA or WEst coast.. they are no brainers... and your larger NNN deals.

    It's clear Opus wasn't sufficiently capitalized to endure the downturn.  So many companies went under.

    I have many criteria for my syndicated deals. They must be in areas where population and income within the 1 mile radius is higher than the 5 mile radius. They must be in local markets where industry is very well diversified, thereby shielding us to some degree from one of those industries faltering and effecting tenancy rates. I like 5-10 year old large scale multifamily the best, where the tenants next step will be to buy a house. I like projects with some deferred maintanence, so there is an opportunity to improvise ROI within the first 2 years of ownership by making simple upgrades and repairs. These are ways to try to protect my investors.

  • Wholesaler · Navarre, FL · Member since 2014 · 252 posts · 86 votes
    11y

    Ben I'm a local wholesaler in the pensacola to FWB area and I get  great deals with those numbers all the time I actually have a duplex right now that with just a little bid of rehab would easily rent at around $850-$900/ mo for both doors. Send me a private message or get my email or number off of my profile page and get ahold of me and I'll send you the details on the property. Also let's connect and I'll send you all the deals you can handle. Thanks 

    JPaul 

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

    have you bought any Multi in Portlandia market its super strong...  Opus got caught with a huge amount of commercial in the PhX area their Portlandia area would have survived on its own.

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

    @Ben Stout 

      lending money or buying notes is a natural progression for many investors most start with rentals tire of them then switch to notes over time.  Not all but many... although poorly chosen notes are just as bad as poorly chosen rental property they usually are the same thing.. Bad note backed up by a bad low end property.

  • Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
    11y

    @Ben Stout , given that I am smart (debatable), and I could get those $30k properties at 70-80% ARV, I would take the properties all day. I would refinance my money out drastically increase my yield. Granted, this probably is outside the purview of your intial question, but I like the think exercise :).

    ,

  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    11y

    Well, not being a stickler but we now have 3 topics being discussed, actually 4. I try to keep my comments on topic because I don't care to comment where the exposure of what I might post will be limited to those currently involved with a thread. People do search for topics and I doubt anyone looking for information on tics, syndications, Cali prices and economics or notes will be selecting a thread title about Sub 30K properties!

    Matt, the appreciation rate may top off, the velocity of money, the time to recover the money increases the IRR as the return is measured over time.

    When "investors" post buying a 25K putting 20K in it then saying the comp is 90 or 120K, I'd say the lack good valuation skills in most all cases, if the buy was actually at market value.

    Ben, I had dirt, lots of dirt, I went to paper because it is much more profitable than dirt. As to the return on an investment, the very best deal ever lied about on BP as to a property transaction can't come close to compete with the return of a good note, purchased with a decent discount and then refinanced in 30 or 45 days receiving the unpaid note balance, in fact, to compute the IRR you have to move decimal places over for my calculator to display the return. You'll "smoke" your calculator! There is no contest! As with anything in reality of business, higher returns have higher barriers of entry to that market, education, capital, market influences, physical and regulatory limitations all effect entering into some market. :)

  • Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
    11y
    Originally posted by @Bill Gulley:

    Jay, that's not really the case in South MO or North AR, not in SE KS either, now, get to KC or St. Louis and that changes. Cali is simply another world, other than the movie star mentality from the 50s, I have no idea why the market there is so skewed, other than geographical constraints with a heavy population.

    Ben, not really sure what you were saying there as to my comments, I don't recall speaking to any of your materials.

    I don't care for turn key stuff generally, especially long distance because an investor can easily end up paying 70K for a 25K property with lipstick and some cousin of the seller as a tenant that will be moving out after a few payments. Without good boots on the ground there is simply too much opportunity for fraud and scams, just another area where some bad actors effect those who may try to give service. :)

    You wouldn't recommend turn-key, in any sense of the word? For example, a SD-IRA company selling RE, which invests in proven markets, documented cash flow and financials, and has made money for their investors in the past.

  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    11y
    Originally posted by @Andrey Y.:
    Originally posted by @Bill Gulley:

    Jay, that's not really the case in South MO or North AR, not in SE KS either, now, get to KC or St. Louis and that changes. Cali is simply another world, other than the movie star mentality from the 50s, I have no idea why the market there is so skewed, other than geographical constraints with a heavy population.

    Ben, not really sure what you were saying there as to my comments, I don't recall speaking to any of your materials.

    I don't care for turn key stuff generally, especially long distance because an investor can easily end up paying 70K for a 25K property with lipstick and some cousin of the seller as a tenant that will be moving out after a few payments. Without good boots on the ground there is simply too much opportunity for fraud and scams, just another area where some bad actors effect those who may try to give service. :)

    You wouldn't recommend turn-key, in any sense of the word? For example, a SD-IRA company selling RE, which invests in proven markets, documented cash flow and financials, and has made money for their investors in the past.

    In the area I mentioned, there aren't any as you described. I think the gest of my comment covers the usual and majority not an exception that may exist. Why would I pay for something I can do better myself? LOL, all markets are "proven" markets and all change as well, historical data is fine, it's not a guarantee of the future.

    Fraud is rampant in real estate, I simply suggest you do your due diligence, good luck :)

  • Contractor · Seattle, WA · Member since 2014 · 137 posts · 44 votes
    11y

    I just bought a well-cared for rowhouse in South Philly for $44k a few months ago. It only needed $500 in repairs that the seller paid for, nothing else.  Found a good tenant who is keeping the place very clean.  I know this because I'm borrowing against it and the appraiser went inside with my manager and took pictures.  It rents for $795, and I could have gotten $850 according to my prop manager but I wanted to rent it fast, though we did our due diligence with tenants.  Tenant also covers all expenses.    After taxes, insurance and inevitable repairs - I figure it will net $500/month, though without repairs it's closer to $600 right now.  Appraisal came back at $65k, which allows me to borrow against this property and try and find another one just like it, since they're giving me back full price.  I feel like I got a good deal and this should be a money maker over time, especially considering the rising values in South Philly in the last 10 years or so.   I'm an out of town landlord but have a great property manager and we're being very picky when it comes to tenants, and rental demand in  Philly appears to be very strong.  I guess I would have been better off buying  a similar house here in Seattle for four times the price and half the rent?  Is that the formula that's supposed to work?  That it's better to buy high because that means you'll have fewer problems?   I understand the difficulties of trying to be an out of town landlord but honestly with the prices in Seattle - I see very, very little room for profit even with lending costs so low.  

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