Thoughts on $15k or less homes/multiplexes

[Jenny Elomaa]

Hi all,

Husband and I are avid BP readers and learners of all things REI, but haven't started yet. We just bought our own first home this spring.

While we save up money for the DP of a rental, we're exploring different strategies. Husband is more comfortable getting a $150k-$250k SFR or a multiplex that doesn't need much touch up in a A or B class area, whereas I'm very intrigued to buy a run down place for less than $15k-ish (use all cash so no mortgage), rehab it, rent, you know the drill.

I’m aware most of those are in class C or lower areas, but my risk tolerance is ok with class C. I have talked with a few investors (online) who use this strategy and it really works for them. The key, according to them, is find that class A/B tenant out of all those other rough applicants.

Any advice that would help us choosing the strategy?

FYI - we’re in SoCal and we’re absolutely not interested in buying here, mainly because of the high prices and renter-friendly laws. We’re looking to buy in the Midwest.

Thank you!