SUB30kCLUB: why invest in sub30k properties in the first place?

[Douglas B.]

For Renee and I, it's all about the numbers. We truly believe that the goal of investing is to get the most return on our investment dollar. A 100k duplex that rents for $700/unit is simply not as profitable as a 30k duplex that brings in $500/unit. It's just simple math.

Ive heard arguments that low income tenants are a risk for crime, delinquency, destruction, etc, but I've also heard experienced landlords say that carefully screened section 8 tenants can be their most profitable tenants!

So why are YOU either already investing in sub30k properties or why are you considering doing so?

I'm planning on releasing a new sub30kclub question each day for us to discuss. PM me with topic ideas and let's learn and grow together!

[Ray Neal]

Douglas I am an avid sub 30k investor. In fact I have 20+ without a mortgage. I am strictly seeking cashflow, and this has allowed me to have no job before the age of 30. Now, being that these were phenominal purchases, there has been immediate appreciation. Most 100% or more, most of which is forced appreciation through light rehab and stabilization.

Now, none of these are in warzones. In fact they are working class neighborhoods with sec 8 and 20 something year old mothers with an SSI or W2 check. No drug dealers, pimps or prostitutes soliciting people.

Anyone who shares a similar investing strategy, feel free to connect with me.

-Ray

I would like to edit and add a few facts. Although older buildings, 90% of them have vinyl windows, siding, etc. The dry in is all updated. 60A service is updated to 100A and knob and tube removed. Galvanized and cast plumbing is replaced with Pex and PVC.

In regards to the comment(s) about lower rent, I do not find that to be the case. The lowest monthly rent in the portfolio is 1050/mo. That is an $18,500 house with a phenominal working class single mother. Duplexes are combined rent not less than 1350/mo.

I have a 4br/2ba in the portfolio I am all in for 24k renovated for rental purposes. It rents for 1195/mo. Now, also have a 105k sfr that rents for the same price. The strange thing is, in my area, the ones who apply for the cheap home will not even try for the higher priced home. Yet, good manageable tenants end up in both when facing a vacancy.