There are a quite a few investors who brave the perils of buying and holding properties for basement prices, all in the name of real estate investing and consistent $400+ cash flows.
These areas can range from quaint working class areas to working class row homes in the inner-city. Most can be seen from foreclosures listing on the national MLS and HUD, but opportunities for excellent cash flow nonetheless. But, when I listen to the discussion, I find that people assume that low priced housing means that it’s a “war zone”, and that’s just not the case.
I’m going to show you here why sometimes it’s as simple as location, and being old, that determines that lower price, even more so than the supposed crime associated that may be associated with that property address.
Waiting for the Money
Sometimes the money just hasn’t reached that area yet, because there were more prime locations that are taking all the money first!
This is completely legitimate reason why some low priced houses just sort of sit on the market, and not picked up quickly. Not every town has a ton of investors sitting there waiting to pick up every house on the market. Most of the money follows a sure bet: Universities, downtown revitalization efforts, prominent business parks and facilities, etc. There is enough money being constantly poured into those areas from developers, new restaurants and bars, etc, that there simply isn’t enough money for everyone to spend their money for a return in every suburb available. In time, that neighborhood can be the next hot spot if its in a solid location, prices are still low, and there are strategic geographic indicators such as access to highways, availability of parks, or even open land that can be easily converted into a school yard, that’s when you …read more