investing in low income strategy?

[Account Closed]

hello everyone, I'm a newbie looking into my first investment. I currently have been centering my search in more middle class areas, but the prices are a bit high. my question is this. how is it going into low income areas? what is your experience with it? is it worth it? as in quality of tenants and fixing it up.

[Barry H.]

JESSE - I jumped into the "low end" world 13 yeas ago because I refused to borrow ANY money - and now I am a Private Money lender (ironic - eh?). Your observations are spot on. Middle class neighborhoods simply will NOT give you a solid ROI. As you slide into the ghetto (joke), you will find properties which will blow your mind as to how cheap they are.

As long as you are doing a realistic ARV (After Rehab Value) for a Flip and solid rent analysis (as your backup plan) in case you go over budget and have to rent it out, then you should be OK.

We rely on you to do that local market research and make sure it is accurate.  If the neighborhood has too much crime and therefore NO purchase is really justified because you need 24/7 security on guard during the rehab and before the Flip sale (or before the rental starts with a Buy/Hold), then you might just need to move on to the Middle-lower class neighborhood.  Bottom line, however, is that if you do a solid market analysis and can present that o a Lender, you can get into a property with ZERO down and low interest or a taste of the Flip.  The money will follow a good deal.  :-)