Low Price Properties in Cleveland - Under $50K

[Da Shiek Woodard]

Understanding these are likely D class neighborhood, what are some success/failures any of you have had with these types of properties in your portfolio?

[Andrew Postell]

@Da Shiek Woodard thanks for posting.  Lower valued homes do provide some specific challenges but they also provide some benefits as well.  While not "all inclusive" here's a list of "pros vs. cons" for properties at this price point:

Pro's
More Affordable for us
If I make a mistake, it will be a smaller mistake
More cash flow

Con's
Hard to get lending
Your expense ratio is higher (if you replace a ceiling fan, it costs the same if the property is worth $20,000 or $200,000...so the RATIO is higher at this price point)
Your class of tenant is very different
Might be hard to get a property manager at this price point (and other vendors too)

So while I was able to make a profit on these houses when I invested at this level I don't invest at this level anymore.  I have continually upgraded my properties through the years and have a good portfolio of properties.  For me, I began at $30,000 homes because I had to...I had no choice.  I didn't have the funds or resources to purchase anything higher value than that at the time.  Sometimes we don't have any choices.  But now that I do have a choice, I perform better on a different price point of home.

Hope all of that makes sense.