Buying a House for 40,000 ?? 600 in Rents??

[J C]

Hello everyone, i had a friend this mornign who was trying to sell a house he fixed and rehab. he put the house up for sale at 64,900 which was too high in my opinion. he then dropped it do 55,900 and noone inquired. im thinking its worth around 40,000. he says he'll sell it for 40,00 no dollar less then that. Using the 2% rule i should only pay for this house at 30,000 max. This is a all cash deal.

So should i pay for the 40,000 ? is it still worth it or do i offer a smaller number and stick to my guns? and if i should offer a lower number what would u offer max

[Account Closed]

In my area the 2% rule would be impossible to apply, if you are serious about purchasing real estate. I have learned though how to buy sound SFR properties that generate a nice cash flow.

I buy locally and manage my own properties. Understanding your own market is extremely important. Regardless of whether you use a property manager or not you will want to know intimately the types of expenses to expect when you rent out a property.

IMO - you have given us very little information to help you in deciding if 40,000 might be a good investment. With out better facts though I would probably pass on this deal. It important to understand what your investing in and the market that your investment is in. Even if 600 works if it remains vacant half the time or requires significant repairs due to deferred maintenance it becomes a money pit.