Investment Property

[Sgt PSN]

1) I am thinking of homes in the $125K range (homes are cheaper in the midwest, but this is still in the lower 15% of homes in my town), so that I can purchase more than one over the next 12 to 18 months. I think I should be able to get into 3, maybe 4, by then. Question -- my feeling is that lower range of homes is more appealing as rentals because a) more renters available that can afford the rent, b) allows more homes to be owned. Any experiences that can confirm or shoot down my assumption?

IMO, this is a flawed theory.  Charging low rent is only going to attract renters with low income and without trying to stereotype anyone (even though I'm going to anyway) I think you run a bigger risk of having bad tenants.  The fact of the matter is, people aren't poor because they choose to be.  More often than not, they're poor because they lack the education, initiative, intelligence and work ethic to better their lives.  If you open up your investment to them you're probably going to find yourself upside down in no time.  I personally have never dealt with it but several members of my family have as well as several of my friends from work.  And every case was exactly the same. 

They bought a relatively inexpensive house that required little work and rented it out cheap.  What they ended up with was tenants who didn't pay rent on time and didn't take care of the house.  In many cases they never collected the last months rent.  The renters would take off without paying and the legal costs of trying to recoup it would outweigh the amount they were seeking.  Then on top of that, there were massive maintenance costs to get the home ready for a new renter.  I'm talking about carpets that smelled like dog shtein and piss, holes in walls, broken cabinets, windows, etc. 

In my opinion, the way to go would be to purchase a house and invest some money in renovating it and then turn around and sell it.  You're going to make just as much money as you would renting (probably even more) and you're not going to have to deal with the headaches of potentially horrible tenants.

If you purchase a home for $125,000 you would be able to make some renovations and repairs to the home for probably less than $10,000 and turn around and sell the place for $150,000 (depending on the local market obviously). 

When it comes to selling, I can tell you that the major selling points in a home are the yard, the kitchen and the master bedroom/bath.  Find a decent house in a nice neighborhood and focus your efforts on those 3 areas you'll see a nice profit.   

[mussa]

I'm glad you started this thread Demon, I am also looking into a rental unit as my first residental investment.  Now though I am thinking twice from some of the responses.  I need to do my research on this. Anyone know of any good links off hand? The good thing for me is a close friend is a realitor and I am planning on picking his brain also. 

[Father Demon]

 found this site yesterday, and joined it.  Doesn't seem very active, but from reading through there are quite a few regulars that seem to know quite a bit.

I looked at my first property today -- that's the first step.  It was pretty much a dump listed at $124K, but really only needs cosmetic repairs, like new carpet, paint throughout, and a couple of minor holes in the walls that the owner said he would repair.  Plus, a LOT of scrubbing.  If I purchase it, the repairing of the holes would go in the contract.  It seems mildly overpriced for the area (clean it would probably list for between $129 and $132K per the realtor), so I have to figure out what the numbers are.

I'm interested in learning more, and seeing if he'll take my low offer.

Sarge...  I thought of rehabbing and flipping, but it seems the really good properties for this get snatched up quick by the realtors or close friends or the realtors.  I asked her about how much I could get if this property was fixed up, which is where I got the numbers above.

This is kind of exciting!!

[PoopyfaceMcGee]

I like watching "Flip This House", because I realize how much better the professionals are at this than boobs like you and me that just want to make a quick buck.

Also, it makes me jism to think what I could do with an old beater house for myself if I had some extra money.

So... the moral of the story is

[Father Demon]

I like watching "Flip This House", because I realize how much better the professionals are at this than boobs like you and me that just want to make a quick buck.

Also, it makes me jism to think what I could do with an old beater house for myself if I had some extra money.

So... the moral of the story is

Not to finish the story???

[PoopyfaceMcGee]

Right.  It's basically that I have no point whatsoever.