The 50K house... location matters?!?!?!

[Rich S.]

Good day BP.  As many have said, it is AMAZING the amount of information on these forums.  I am interested in fix and flips as well as rentals for long term cash flow.  One of the things I see debated a lot on BP is the idea of the $50,000 house.  You have the "Can't make money long term with $50K house" crowd, along with the "I make $5,000-$20,000 a month cash flow, on $50K houses" and everything in between.  My question/thought is simple:

Isn't there a DISTINCT difference in the stigma of the $50,000 house depending on WHERE it is?  Going back to the adage of LOCATION, LOCATION, LOCATION...

For example, I'm from MN... I could buy a $50,000 or less house in Minneapolis to rent and cash flow.  If it is in Minneapolis, it will have a MUCH different set of variables than if it was, say in Springfield, MN.  One is completely urban, while the other is rural/small town.  I see the term "war zones" which I assume are places of high crime/safety concerns mentioned when talking of these houses.  Maybe that would be the case in Minneapolis, but I can't imagine it being the case in Springfield... meaning an URBAN $50,000 house will have much different variables than a RURAL/SMALL TOWN $50,000 house.

Simply put, it sure seems to me the debate is often times the people debating against investing in such deals think of URBAN issues, while there are many folks having success in RURAL/SMALL TOWN.  There are many having success in urban situations as well, I'm sure, as someone has to own these homes.

Final question... if looking at these bottom of the pole deals(I mean cheap in the marketplace, not bad deals)... to help new folks get into the game with little money, does it make sense to invest in RURAL bottom of the market homes vs. URBAN bottom of the market homes?  Are the RURAL issues easier to manage?  I understand you have less access to tenants as less people live there.  Just a thought I keep coming back to when folks are debating this issue.

[Jordan Moorhead]

@Rich S. you know your town.  I still have buddies in Louisville that are buying blue collar houses in Louisville for $70-80k. Every market is different and small towns are absolutely different from large metros. Minneapolis is trying to be an over regulated hell hole so who knows what'll happen here. They are even proposing rent control in some political circles on top of the $15 an hour minimum wage.