Buying a house for 10k?

6 Replies

I'm very interested in buying in cheap and putting in my own personal leg work and resources into rehabilitating then wholesaling it.  I'm okay with spending lots of hard time and effort on screening, processing, and rehabilitating a house.  I only have about 10k for the initial purchase of the house.

What would be a good place to start to find such a cheap property? Delinquent taxes? Tax lien? Forclosed/bank owned? 

Please share!

@Giovanni Montesclaros

Well,

I'd caution you #1.  Had a friend that did this in Indianapolis, and he bit off WAY more than he could chew.

I remember seeing lots of houses in the 2-8k range in Detroit.  I'm not sure how those would pencil out.

The better place to start in my opinion is to get into something a little 'safer' and get the experience taking on a couple projects.

That said, I'm an engineer and more naturally risk averse than some.

There's not many markets where 10k will get you anything but a liability / house that needs to get pushed into a hole.

Buying a 10k house is difficult to make work, even in the cheapest of markets it will likely take $30,000+ worth of work to make it worth living in and can be in less than ideal areas with hidden defects to boot.  I'd look at other options before going with this strategy.  Just my two cents.

@Giovanni Montesclaros unfortunately, rehab a lone would be way more than $10K. You might want to consider wholesaling to flippers or buy and hold investors that will do the renovation until you can build up capital. I wouldn't try to wholesale these low end properties in bad areas though. You might have a hard time finding buyers for them. 

@Giovanni Montesclaros

Besides the sound advice you are getting I believe you may have missed something a bit more important than "biting off more than you can chew" 

You mentioned buying it, rehabbing it and then wholesaling it. Unless I missed something I don't believe you can wholesale once you have purchased it unless you have it under a contract that you can assign to another investor. So this would mean that the seller would have to agree to allowing his property to be under contract until you finish the rehab which could take months. 

I am looking at the 3 people on the right and perhaps they can pitch in @Will Barnard @j scott or @shannon s. or anyone else for that matter. 

I would like clarification on this as well a I am no wholesaling expert. Just going by what I've read and heard. 

All the best,

Jorge

@Giovanni Montesclaros $10K won’t get you a home and supply the money needed for rehab. Anything you’re going to get “on the cheap” (THAT cheap) is going to need major work, permits, take time, etc. So if you pay $10K for the property how will you pay the holding costs, permit fees, materials costs, etc.? That’s assuming you’re GC or something of that nature and can pay your buddies for labor with 🍕 and 🍺

Hi @Giovanni Montesclaros ,

If your goal is to start investing in real estate and learning a great way to start would be with a multifamily home and house hacking it. @Brandon Turner had a webinar this week on how to purchase your first multi family in which he explains FHA financing and other great stuff. This will allow you to build that muscle of actually fixing and repairing items in your own multifamily before going out an purchasing and completing a full rehab on a 10k home. I was able to start that way and then moved onto fixing and flipping and wholesaling. Just a thought.

Wish you best of luck.

Joaquin Rosario, Real Estate Agent in New York (#10401307677)

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