Low End Condos as Investments - Houston SW
Happy Friday. Let's talk about something I've been wondering about for some time.
I saw some really inexpensive 1/1 condos down there in that 59 & Bwy 8 area. The standard 'investor/handyman dream' deal, just needs a little TLC, etc. 850 sq ft roughly. I figure it would rent for about 800 after some paint and elbow grease. They are asking $36K for it, but I see that they have been selling recently for $21-$22K. One unit went for $44K all fixed up with granite and the whole bit.
Not the first time I see these deals down in that little area, there will be more deals like this one, so not worried AT ALL about losing it. And that brings me to my question... why? The numbers work, from a cash flow investment perspective. Must be some cost I am not taking in to account here?
Or is it just hard as heck to get a decent tenant down there? Maybe I'll run down and do a drive-by, just to see how rough it is or isn't.
I kinda like the idea of plunking down $21K on this, cash - no hard money or anything. Sink another $5-6K getting it fixed up and then rent it out for $800/month. In fact it probably only needs $2-3K. Collect 3-4 months of rent and resell it to somebody for $35-$40k.
Or maybe attempt to do a BRRR on it - financing might not make sense for such a small amount, though. Then go get another one - or not.
There are some things to like, and some obvious risks to not like also. Chief among my concerns would probably be my ability to resell the thing, once improved and rented out.
Thoughts? Anybody else playing this sandbox?