Investing in Youngstown, OH

[Christopher Nerio]

Hi BP family, I am new to investing in RE and I have recently made a connection with an investor in Youngstown, Ohio. She said she owns 10 rentals and has been investing, strictly, in the 44507 and 44502 zip code area of Youngstown for 4 years. The prices of the SFHs is what really intrigues me. From what I've researched and what she told me, it is a low income area and has about a 13.5% vacancy rate. The lady makes her money through her rentals, managing rentals, and renovating the properties. So I buy the house, her company renovates it, then manages it. I live in Northern Va. She said that with about $45K ($5-10K for property, $5-10K for material, $15-25K for labor), which covers any major repair or replacement, I would have good cash flow. However, from what she told me, the rents are between $400-650/mo. According to my calculations it seems that my max investment that I would like would be $25k total to receive the monthly income I would like. The other concern I have is that she said that she doesn't do yearly lease agreements. Her tenants are all on a month-to-month cycle, which she said is normal in the area because with the area being low income, sometimes you get a bad tenant that you want to be able to evict them fast. However, she did say that because it's low-income many times the government pays their rent and that she tries to do a good screening of the tenants before hand (credit check and background check). Anyway, has anyone had success in Youngstown, OH? I hear it's kind of like Detroit? Should my max investment be less or more than $25k? What is the average rental rate there? Are the costs of labor and material accurate? Is it an area, that if the economy took a turn for the worst, that my rental would still be cash flowing? Any advice would be great. Thanks BP family.