All Forum Posts by: John W.

craigslist
Also it's written in my lease that I'm not responsible to replace appliances. But I will help a tenant find one on craigslist for a pickup fee

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Use bank financing and only buy good deals!

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You will happy if you say no.

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You will have to put it in your personal name if youre getting bank financing.

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A lot of renters in these depressed areas dont have their finances in order and dont qualify for mortgages. And many that do become homeowners soon fall behind. All of my wholesale deals and the majority of my leads have come from these areas in Buffalo.

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Originally posted by @Mike H.:

My advice would be to be very careful buying those low end homes. On paper they always look good. But they can be a big money pit too. Homes in that price range tend to be in some of the lesser areas which also tends to equate to more vacancies, more collection problems, higher turnover costs in terms of repairs, more evictions, and on and on.

The numbers on paper look great. But the reality is those types of properties require an incredibly tough property manager to make any money from. And if you aren't making money on rent, you aren't making money - because there is no appreciation and very little principal paydown going on with those low end homes.

I would set my sights a little higher and try to get into the 100k to 150k price range of homes to where the rents are in the 1300 to 1500/mo range. You'll be in much better areas (assuming the same midwest towns above as California doesn't ahve 100k homes. :-). You'll get much better renters so there should be higher occupancy rates, less collection issues, less make ready costs and repairs, etc, etc.

And the real value is that you'll make money off rental income, principal paydown, AND appreciation.

I've known a couple of people that made some good money on the low end stuff. But that was before the landlord laws were put in place (he would evict by showing up and removing their door) and it was a herculean effort to stay on top of them.

Quite honestly, your chances of going bust and/or losing money for a given year are every bit as good as they are at making money. I don't like those odds. But thats what happens when you are in those areas.

What he said. In areas with nice schools where people are lining up to rent your property, people are embarrassed and terrified if they are late with your rent and will gladly pay late fees. In lower income areas, you are dealing with more people problems.

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A lot of renters in these depressed areas dont have their finances in order and dont qualify for mortgages. And many that do become homeowners soon fall behind. These are dysfunctional areas to say the least. All of my wholesale deals and the majority of my leads have come from these areas in Buffalo.

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double post sorry

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Originally posted by @Brent Coombs:

Originally posted by @John W.:

I've had success wholesaling in 13K-25K range. Some of those properties were also good rentals if you don't have big ticket repairs and can find someone decent to do the work.

Aah, but, have you had success HOLDING and renting those same type of properties for lots of years? [If not, why not?]

(Or, wouldn't you be seen holding onto those properties - with a barge pole?) Welcome to BP...

I'm more of a fan of wholesaling these than I am holding on to them, even though they can cash flow nicely. Just my preference. I had the perfect scenario for these type of properties; bought a double for $12.5K with each side rented by two long term tenants that wanted to live the rest of their lives there, pay on time and were very low maintenance. I got the the rent up to $610 a month. After several months I realized it wasn't it wasn't really for me and I would rather have a nicer property nearby than one that cashflows more far away in a run down part of the city. So I sold it for 19.5k and the buyer didn't even bother to look inside, lol.

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All Forum Posts by: John W.

John W. has started 21 posts and replied 251 times.

Post: Are you a CHEAP INVESTOR?

Post: How to go about Appliances

Post: How would you start in Real Estate if you had $100,000?

Post: Tenant requested to allow dog after moved in

Post: When to form an llc. before or after your fist deal?

Post: Low purchase cost and high rental, is that possible?

Post: Low purchase cost and high rental, is that possible?

Post: Low purchase cost and high rental, is that possible?

Post: Low purchase cost and high rental, is that possible?

Post: Anyone out there specializing in under 30k properties?