Updated over 7 years ago on . Most recent reply
Rentals in rough neighborhood
I am new to the REI industry but I have educated myself with as much as I can possibly to at least get me to my first deal. Me and my partner have a few properties that we are in the negotiation phase with. We don't feel as though these properties would work for fix and flip investors mainly because of the area but we are thinking of negotiating seller finance and putting about 3k into repairs and using them as rentals. Our monthly cash flow looks to be about $275 for the first 6 years or less time and then we are looking at $475/monthly cash flow. Any ideas or suggestions
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First you have to determine if it's a "rough" neighborhood or a working class neighborhood. Is it a place where people are making very little money and have none left over, or is it a place where there are open air drug deals during the day and cars broken into every night? There is a difference.
Next, if you decide to buy and manage there, SCREENING is your highest priority. Do not be in a rush to sign a tenant. Make sure the tenant you end up signing is as good as you can possibly get. Screen properly, and you will have very few problems with the tenant. Screen poorly, and you can have many problems.