Clayton Richard Podcast #151 - 3/1's for $40k, how to?

[Kenneth Cowan]

I listened to Clayton's podcast this weekend, and got really motivated by his strategy.  I liked his strategy of targeting unit's he knew would rent for around $700 once updated, he looked for 3/1's and cost after repairs for him were about $40k.  

I've been looking at similar numbers, EXCEPT, I cannot find deals at that price point.  I guess the markets I am looking at just don't allow it.  I am looking in smaller towns (50-100k) in Illinois, but just not getting close to that number.  Does anyone have suggestions of markets where you can get this kind of availability?  Right now, I think my biggest problem is I am searching on-the-market properties, and it sounded like he was finding a lot of his deals off-the-market.  But before I go looking off-market I want to make sure I am looking in the right areas.

Second question I have is about his focus on 3/1's. Does anyone have support for this housing type being the best fit for the BRRR strategy? I've been pulling averages from craigslist and rentometer for the areas I am looking at, and it looks like renovated 3/1's or 3/1.5's provide the best opportunity for higher rents without much additional acquisition costs.

[Steve Sanchez]

I'm doing this in Peoria now, but my max investment is 25k and I believe that one rents for $750, 3BR 1BA as you described. I purchased that one already rehabbed and with a tenant in place. 1 1/2 years later I still had the tenant and they recently moved in to one I picked up for 10k and put 3,500 in to. It is now a 6BR 2 BA they rent for $1,090 (however that is a VERY unusual situation, right place at the right time).

-Steve