Strategy

[Brad Fitzpatrick]

Im thinking about buying foreclosed property at a low price, fixing up the properties so they are nice, getting renters in the house then listing the property for sale as an investment. Anyone have any experience with this and what potential problems I could face.

I am thinking about normal renters and Section 8 tenants.

Any thoughts would be greatly appreciated!

[Jon Holdman]

Its not uncommon at all. Like Glenn says, though, the devil is in the details.

Something to consider is that you're essentially doing a fix and flip. But by putting a tenant in place you're limiting your pool of buyers to investors. Someone who want's to live in the place is not a candidate buyer.

This is often called a "turnkey property". But I think you're not doing anything after the sale, where many of these turnkey companies offer property management and maintenance after the fact. All too often these turnkey companies seem to be offering an over priced product to naive, out-of-the-area investors.

Personally, I don't have much interest in a property that has a tenant in place. They're not my tenant. For all I know, you've put them in place with little screening. You don't care if they work out long term or not. I would rather buy the property empty and then fill it with a tenant of my choosing.