Investing in the hood, slums, ghetto, warzones, that side of town you normally don't go on....

[Chaz Reid]

Just wanted to see who's out there that deals with properties in the listed locations. I've been doing some browsing and the prices are looking pretty good. But I do know that everything that glitters isn't gold. Just chime in, I would like to PM you if you don't mind...

[Shawn Holsapple]

@Chaz Reid - as a former low end landlord, I don't have much good to say about it. Yes, I was drawn to the glamour of the huge ROI [on paper at least] and the low cost. Some of the highlights are:

Typically older homes = lots of maintenance. Even after doing nearly a full rehab, there still seems to be $50-$200 per month of "Gremlins" that pop up with the old homes. [pre-war, 1940 and older]

Lower rent = tenants who could care less about your property [typically]. For me [Indianapolis Metro] that is anything under $700 for a SFH or $650 for a duplex. This group of tenants have a completely different set of values and rules than you and me.

In addition to the above factors, vandalism is almost certainly going to be an issue. From stripped copper to AC units being taken [sometimes while the tenant was home and using it].

With all of that comes the fact it's harder to find a PM that will even take on the lower rent units. This leads to lower quality managers that need more "managing" from you and it just snowballs from there...

After two years and about 25 low cost properties, I finally sold my last "pig" last fall and now only deal with post war built, SFH that rent $700+.

My vacancy rates are down in the low single digits and maintenance is virtual non existent.

Not to say that I still like the "lower" cost rentals [like @Sara Cunningham mentioned], just not the bottom of the food chain.

I like the $750+ rent SFH that I can be around $50k all-in after rehab. Versus $15k-$20kk for a $600 rent that comes with 30% vacancies, vandalism, non paying tenants and tons of headaches. Also, about 30% of my units are now Sec 8 and I've not had any issues [yet] with them.

Whew, that's my free advice and hope you find it "worth every penny"!