Most affordable, cash flowing, non appreciating, RE in US?

48 Replies

@Eli Webb

I came really close to buying a duplex for 30k in Anderson Indianapolis a couple years back. It ended up being more of a fixer than I thought. I almost got into the Kokomo market as well. Houses were going for 30-40k rent ready. Geez...

Memphis is still very affordable..

Originally posted by @Eli Webb :

In what markets can you buy 50k-60k SFH's? 3 bed, 1-2 bath. I'm looking for homes that are rent ready. In C neighborhoods/working class. No war zone. With a demand for rentals. Cash flow is my plan. Is this possible anymore? If so, let me know your thoughts.

Upstate NY(rochester, buffalo, syracuse), ohio (dayton)  st. Louis

 

@Eli Webb you can find them in Oklahoma City but they have to be off market. You won’t find anything decent on market with how competitive everything is.

I get that you want to focus on cash flow, but why specifically look for 0 appreciation? 

@Harman N. We are in the midst of a 1031 exchange, because the tax consequences of selling due to 20 years of appreciation are huge. There's capital gains, tax on depreciation whether you take depreciation or not, Obamacare tax, and state tax if applicable. For us it would have been 38% tax on appreciation. We are only looking for cash flow properties while being a buyer in the 1031, because now our funds are tied up from the sale of our real estate unless we pay the taxes to get that cash out.

I would recommend Kansas City because I live here but have intimate knowledge about the history and the job market and what makes it so recession resistant. 

Yes it is very possible. The market I am in has such properties if you are interested let's connect!

@Harman N.

Good point. What I meant was, typically in some of the big cash flow markets where property values are low. What I have found is that There is not a lot of appreciation. Appreciation would be great. However, my goal is cash flow now. I wouldn’t mind appreciation. So if I buy something in Toledo or Cleveland I don’t expect appreciation even though it would be a bonus.

Let’s go!

For example, I was going to buy a house in Garfield Heights, Ohio. Just outside of Cleveland. This was about 2 years ago. The lady paid off the house, and she was selling it for the same price that she purchased it 30 years ago. Prices are obviously different now.

Some posts already made about Indianapolis, but I'll add another one. There are certainly C/D class neighborhoods that have 2/1 and 3/1 (even some 3/2) in the 50-70k price range. Just know that you're probably looking at properties that need significant work and you're probably looking at 80-110k all-in depending on finishes. 

Sounds great, just be aware of the repair costs, insurance costs, and high turnovers that come with such type properties. 

I had a property like this in Warrensville Heights in the Cleveland, Ohio market. It was a 1952 cap cod home 4 bed, 2 bath over 1,500 sq. ft. bought it for $60K. 

I had it for 4 years and I had 4 different tenants in it as every year when the lease was up they would move out and I would pay on average $5K to fix it back up to rent again, not to mention the nickel and diming that the city would do with landlord tax, occupancy tax, city permits, city inspections that always found violations no matter how many repairs I did. Not to mention on the repair calls for this and that from the tenants.

I sold it last year for $67,500 and was just glad to unload it as it was a money pit.

Lesson learned for me.

Originally posted by @Eli Webb :

In what markets can you buy 50k-60k SFH's? 3 bed, 1-2 bath. I'm looking for homes that are rent ready. In C neighborhoods/working class. No war zone. With a demand for rentals. Cash flow is my plan. Is this possible anymore? If so, let me know your thoughts.

You could have hit these numbers in a lot of places in years past. Cleveland being one of them. In 2021 prices have been pushed higher though. Probably need to be in the $60k-$80k range to accomplish this goal now.