So you want to buy a home for under $40000, what can you expect?

So you managed to find bigger pockets and it's opened you to the world of Real Estate investing. You have done your research and you're looking at the Mid-West market where homes are older but for your budget very affordable. Hot markets like Indianapolis, Kansas City and Cleveland have come across your key word searches. Think i'm in California the home prices here are sky rocketing yet over in these cities I can buy a cash flowing property for $40,000! Why are they so cheap?

Well my young investor, there is no secret sauce to real estate. This is a game of you pay for what you get. It's that simple! 

The following are images of an inspection report of a Double my client had under contract for $37,000. Even thou I warn him it does require work, may investors believe that these homes are a great deal. Just go to the bank, get financing and start being total passive. 

So what can you expect? Just take a look at the pictures. As they say pictures are worth a 1000 retweets.

Older electrical panels, lots of pretty wiring everywhere. 

Water/Moisture build up here have ruined the joists. Active leaks present.

Oh what is this beauty? It's a newer water tank. But look at those walls!. Thats a wet basement. Going to need to fix those leaks and dry lock that basement.

Nice bathtub for 2017, still rocking the pink. Funny tenants actually occupied this apartment and taking showers in this bathroom every day.

HVAC needs a little work. Nothing a like cash can't fix.

Downstairs bathroom, looking a little bit more updated. But your still going to be coming out some capital to freshen up this bathroom.

Some more leaks that occurred and stained the roof. 

As you can see for $40000 you get a house, but a house with many to-do items to get you an investment that is going to be marketable to tenants that will rent quickly. Because no tenants = no money for you. Plus lets not forget that the repair costs on these items are unknown but this is additional CASH you need to make these repairs.

I hope that by reading this you get an image of what you can expect when your buying lower end priced homes. You're not picking up a rent ready, get top market rents when you shop in this price point.