Yep. The old saying is “Buy the worst house on the best street”. But then again, the other saying is “you’ve got it backwards, you buy the best house on the worst street and then you can ‘lord it over’ them”.

Vacancy Loss
Maintenance
Property Tax
Insurance
Utilities

then see if ur cashflowing.

That means there’s little profit on the resale side. It’s top of the market. Imagine someone bought a website for $500, fixed it, and sold it to you for $1,000. Would you buy it? That’s basically the max it could/would make. You have to ask yourself, just like you would with a website: if the potential is there to rent it, why not do it themselves?

Good friend of mine is a self-proclaimed “slum lord”. He buys junky houses for a song, doesn’t do much to them, rents them out for cheap. He’s up to nearly 20 houses now, well over $1.5 million in net worth on his houses alone. He’d say find a house like that BEFORE its fixed up, buy it, jam someone into it.

Stuff to think about. Feel free to ignore all this.

Regardless, the economy is SURE to follow the big housing crash, because housing has been propping up the US economy. SO, first the bad lenders go into bankruptcy. Then Wall St. stocks fall. Then China, who is sitting on HEAPS of US currency take a big hit, maybe floods the world market w/ US dollars. US currency becomes a peso. World economy slows down. Factories/companies have to scale back…

Now everyone is a lot more cautious because firms are having to close doors, lay off people because orders aren’t coming in. So the rate of house sales in YOUR area will be effected. People don’t go out and make big life changes in that kind of economy.

There’s only one thing that can protect you locally: Do you have a new factory or something big coming to town in the next year or two? If so, then there will be a continued need for housing. Especially renting as single guys, etc. will need a place to stay.

If this isn’t the case… wait. What are six more months going to cost you? $1,200 at most in terms of lost rental income? But you can generate more than that using the money and doing Arbitrage, etc.

And then you’ll know whether this fall-out is real or not. And if it is: Party time! Cheaper housing to buy. NOTHING like buying at the bottom of a cycle. Then you can’t lose.

But if you buy now and the economy goes down, you’re stuck with a house you can’t rent, AND you can’t sell for what you paid for it. Now instead of making you $200 a month its costing $510+insurance+property tax.

PS: If you DO go ahead, the sale price is $89, start at $80 not $85! Maybe even $75! Never start that high. I would start $75 for sure, to test the water. All they can say is “no”. They won’t turn you down if you make a good offer a second time from you. And if they come back at all, you can get it down from there.

PPS: All the real estate experts I know say one thing if you’re buying RENTAL property, which is get it at least 10-15% below market price. And you might make up to 100 deals before you get one sufficiently low. This way if you need to turn the place around to break even, you can. Because to resell it means all these fees again…real estate, laywers, etc.

PPPS: Always buy the LOWEST priced house on the block, if you can. Because your house will always look like a bargain compared to the others and the value of the area will increase, bringing your house up a few notches. Whereas the biggest house on the block will rise much less in overall value.

Good luck!

As for the other property.. some may have done their due dilligence and found something costly. Remember to ask for all of the papers, tenant reciepts, tax papers, it will make a difference if a management company manageed it or the landlord, so remember to look into that…