I let a property slip through my fingers.

[Michael Galesky]

Ok so I took to long to "feel good" about a deal when I should have just acted.  A property that I located on Craigslist.org 4 unit rent 2/1 each $625 per with 50% occupancy and a repair cost of about $15k at the low price of $75k.  My calculations put me at $300/door cashflow but it is in a rough area.  I finally called about the property and I found out it just got snapped up by another investor.  I'm on the list for a callback if the deal falls though but I'm not holding out hope.  I have readjusted my thinking and will act on a property with these numbers next time around. Oh and the rate of return calculated at about 13% unless I financed it and then it went to "holly crap" level.  

Mike

[Mike H.]

I think you're better off missing out on that one. Cash flow/returns may look good. But the comment that "its in a rough area" is more than enough to think you didn't miss out anything.

Cash flow isn't everything. Rough areas equal more money in turnover because the tenant pool isn't as likely to take care of the place. Tougher collections so you're effective occupancy rate will be lower. And no appreciation.   

Seems to me you're lucky that it got snapped up by someone else.

Early on in my buying, i would go wherever I could make the numbers work. And there's a handful of houses that I would love to get rid of. They're not in warzones. But they're not in the areas I'm in today either. Further from home. Tenant pool is much less desirable. And appreciation potential isn't that great either.

I do have a nice chunk of equtiy in them though as I really stole some of those (it was during the bottom of the bust). So my goal is to sell those at some point and take the profits and use them to buy a house or two in the areas I'm in now.

But I actually think you're better off staying out of the really bad areas like that even when the numbers work. Its good to hesitate. Being an investor is so much easier when you're dealing with a better tenant pool. You still have some of the same problems. 

But nowhere near as often. :-)