What do I do next?

[Rudy D.]

So I was looking through the classifieds section here.

I found two properties for sale that are currently being rented. That is what I wanted, because then I don't have to place ads to try and find new tenants.

One is a duplex in Milwaukee for  $40k, with a combined rent of $1250 a month. The other is a place in Baltimore for $25k with a rent of $800 a month.

So what do I do next? Do I just call the number in the ad and buy it? 

I can post links to the ads if it helps. I just didn't know if that was against the rules, so I didn't do it.

I realize that these places must have problems, otherwise they probably wouldn't be up for sale this cheap. So what is the next step? Do I hire an inspector/appraiser to look at each property first, then make an offer?

[Nancy Roth]

@Rudy D.

There are many houses for $25K and under in Baltimore but they almost always need a great deal of repair. You do have tenants in there--so why is the current owner giving it up for so cheap? What is the status of their lease? Are they current on rent? Are they on the point of eviction? Are they trustworthy residents, i.e. law abiding and not destructive? Inherited tenants are not always a blessing. Usually it's not an instant cash-flow prospect, no matter what the marketers tell you. In fact, do you even know the marketers? 

You can't judge the house from a picture on the web, and an inspector can't tell you if the house is right for you. You know nothing about that neighborhood, which is quite spotty and troubled in many places.  

You stand to lose a chunk of change going about it this way. I know it seems cheap, but don't kid yourself. Bad tenants, deferred maintenance expenses plus ridiculously high property taxes in much of Baltimore will bleed you, I can promise you that, having made that mistake myself.  Also there are a lot of property managers who will exploit your naivete and the long distance between you and the property. 

Don't do it, Rudy D. Stick closer to home for your first investment. 

Nancy Roth