Updated over 6 years ago on . Most recent reply
Potential rental property
I have been looking around for my first property and have come to the conclusion I just have to wait to save up a down payment. I started looking in some not so great neighborhoods and noticed these houses and trailers are really cheap. I can actually afford the down payment. One double wide is on the market for 20000, and is in need of some obvious rehab. My reasoning behind wanting it is, it’s such a low price I can afford the down payment, I can learn some of the rehab, and I won’t be in for that much on my first deal. However it’s in a not so great neighborhood, does the neighborhood and type of tenants outweigh the amount of knowledge and experience I can gain from taking this deal. I figure I can start cheap and learn for cheap figure out my exit strategies so I don’t lose too much, and try to figure this out so I can finally move forwards.
The numbers are 19,900 listed price, 4000 down. Average monthly payments of 150 towards mortgage. The area can easily rent for 550-650. Maybe 10000 in rehab, a lot of it will be sweat equity so it may be cheaper. I potentially want to brrrr the property and comps in the area are around 40000 to 60000. My main question is, are bad neighborhoods the absolute no go in real estate? Even if it’s just my first deal and so cheap?