Upside down properties

[Kendall Mitchell]

Hello everybody I'm a investor currently living in the Chicagoland area. I was looking at properties in the Milwaukee area and they have many foreclosure selling for under 20k and the scope of work range from 50k-100k easily. The ARV for many of these properties wouldn't break even with the purchase price and rehab cost, thus selling the property would be losing money. I was thinking that a buy and hold approach would be best. What is the best strategy for properties with lower ARV then the purchase price and rehab cost?

[Brandon Roof]

Unfortunately, I think the best strategy would be to move on from it.  Whether that be refining your search criteria or looking in different areas, you certainly don't want to try and rationalize something that doesn't work financially.  In the scenario you provided, buy and hold is no better in my mind.  I would be patient and simply look elsewhere.