All Forum Posts by: Lucas Thomas

 Yes! I used to own a Property Management company and ran 200+ units in low-income and higher income areas of Phoenix, AZ for a decade. Low-Income has been my bread and butter. I love em as investments as the cashflow is so much higher and as long as you understand the market, you will be fine. I currently own both and always prefer my low-income areas over high. All are 1-12 units. The low income areas also appreciate as well as any other as a wise man once said, "The Rising Tide Raises all Ships" which has been my experience in the many years I've been in real estate. 

Like @Carrie said...

You need to be able to handle the "Psychology" of the investment. I always prefer my low-income properties over my high-end as the expectations are so much lower and their grateful 80% of the time. You also can S8 your low-income and make really good money. You just need to be able to handle the "Psychology" of it. 

Where as higher-end makes less cashflow, have much higher repair costs/expectations, and the tenants can be primadonnas. I hate to buy for appreciation only, as then every maintenance issue and catastrophic issue (Collapsed Sewer Line, Air Conditioner, etc.) has to come out from your own pocket and not the investment.

@Irene, if it was me, I'd find a "transition area" that is safe enough, but inexpensive enough to make the number work. It will be a process!

You can do up to $100k per door, but only if you can get the rent to work out. 

Do you know how to do rent comps or S8 pricing? 

Yes. 

You always have to remember these rules when buying: 

1. Bedroom Counts are King: 1 Beds/Studios are terrible IMO as you get "Lone Wolf" Tenants only on One Income. 2 Beds are your standard bedroom count, but then your competing with the local apartment buildings so getting Premium Rent is harder. 3 beds are great as they are more rare in the "Apartment World" so you can basically get a Bump-Up in rent as its not standard. 4-5 beds are AMAZING as they aren't standard and you can get much higher rent prices in general.

I've actually house-hacked several 4-plexes in multiple states so it is a great strategy, but you need to know the nuance of rent and get the cost per door to $85,000 or less. Otherwise you your risk is too high.  

 The key is to get the price down to around $85,000 a door or less. Rent doesn't scale well as it becomes an affordability issue for a lot of people. I own Buy N' Holds in 5 states and usually once a market gets over 100k per door, the numbers don't work. 

Have you tried a Triplex or 4-Plex? 

I found this one that might cashflow. 

https://www.redfin.com/TX/Killeen/3405-Victoria-Cir-76543/ho...

Usually if you can't make a duplex work, you can make a triplex or 4plex work. 

When your searching for property, use the county so you get some of the suburbs included in the search. I prefer Redfin as its the most professional grade property search from my experience as a Landlord Real Estate Agent.

Hello!

I specialize in low income rentals and they are the best investment money can buy. You just have to do it right as most people don't.

But here is the Rules to Buy: 

The city metro (Include suburb cities, etc.) needs a population of 500,000 people. The purchase price has to be less than 75k a door ($75k for SFH, $150k for a Duplex, $225k for a Triplex, and $300k for a Fourplex).

You can't really cash-flow if you pay more than 75k a door. You will have labor/rent issues if the population is anything under 500,000. 

There is only like 5-6 cities left that meet this formula.