All Forum Posts by: Tyler Brown

Those are great ideas, unfortunately I live in New York City, which really precludes pretty much anything in my immediate geographic area.

About the closest that I've been to find similar deals like these is the eastern edge of Pennsylvania, in towns like Scranton or Allentown.  Those are a 2 to 3 hour drive away, so not something I'd be doing every week, but once in a while would be manageable.

Hi all,

I've been doing some research into real estate investment for a while now and am starting to get serious about making my first purchase.  My goal is to purchase a multi family unit for a monthly cash flow.  Any appreciation is nice, but that's secondary.  After a year or two, continue the process with another purchase, and keep going from there.

I see quite a number of extremely low priced multifamily homes in small towns, mostly in the south or midwest, that rent for a massive premium over what a mortgage would be (assuming I didn't just pay in cash).

These are usually located in small town America, although with a college or military base nearby that brings in a steady stream of renters. 

As a couple of quick examples, one I've found is a duplex with an asking price of $43k.  Both sides are currently rented by long term tenants for a combined $975/mo.  Another duplex has an asking price of $35k, has a brand new roof and water heater, and has tenants currently in place that are paying a total of $925/mo.

Those are just a couple of examples.  I've seen some even as low as $25k with similar circumstances.

From the pictures, it doesn't look like the homes need any major repair work (obviously I can't really confirm this until an inspection), and even if you factor in property taxes, insurance, the occasional month or two of vacancy, basic repairs, maybe a property management company since I live nowhere near these places, etc... you should still be coming out way ahead on a $40k home that rents for close to $1k a month.

Which leads me back to the title - what's the catch?  It sounds like a great idea on paper, but it's setting off my "too good to be true" alarm.  I assume if it were this easy to find dirt cheap properties that have such a positive cash flow, everyone would be doing it.

Thanks for your input!