Don't Buy Rental Homes in Rental Areas? - Posted by Frank

Posted by Bert G on March 05, 2000 at 12:09:34:

Real estate shorthand for “subject to the existing loan”. Basically its like taking over payments without formally assuming the existing financing. That term used to bug me too.

Watch where you’re dangling that participle.

BG

Don’t Buy Rental Homes in Rental Areas? - Posted by Frank

Posted by Frank on March 04, 2000 at 23:29:01:

Just finished reading a book by Mike and Irene Milin and in it they say don’t ever buy a rental property in a rental area. They say that tenants want to move up in the world, even if they can’t buy a home. Thus, they found that the best rentals with lowest vacancy were nice areas where tenants felt like homeowners - not the cocaine & gang neighborhoods that many investors concentrate in. I thought this was interesting and good to hear that nice areas can be profitable. I don’t know about anyone else, but I’m getting tired of fearing for my life going to look at dirt-cheap properties in terrible areas.

rental to owner ratio & rules that keep you out of trouble - Posted by RR Smith

Posted by RR Smith on March 05, 2000 at 07:59:34:

“Begin with the ending in mind.” …One of the books I read suggested that a 1:4 ratio of renters to owner occp. was as high as you want to go as a general rule. … Personally I us the 3 abondan. car rule, 3 or more bad cars, don’t buy on that block. ~~~~~Of course these rules can be broken by skilled professionals (don’t try this at home). Turn-arounds are usually found in the bargin basement or at the edge of the city.

Re: Don’t Buy Rental Homes in Rental Areas? - Posted by CarolFL

Posted by CarolFL on March 05, 2000 at 04:57:56:

Frank, you are looking for sellers, not properties. If you can get the right deal (cash flow or flip value, depending on what you are in to) deals can be found anywhere. So as my buddy Ray Alcorn says : start with the end at the beginning. what is your objective?

Cash flows on rentals may be more difficult in better areas, but if youcan take them subject to it may help. It depends on YOUR market.

Most of our properties are in lower to lower middle areas. But we make them very nice, are selective with our tenants, and avoid war zones. Works for us.

Re: rental to owner ratio & rules that keep you out of trouble - Posted by CarolFL

Posted by CarolFL on March 05, 2000 at 16:54:46:

My formula used to be burglar bars … if I could see any from the front yard of a property, I wouldn’t touch it.

Figures … my office, a neat little home zoned RP in a historic district has burglar bars … and I’ve grown to find them downright decorative!

Re: Don’t Buy Rental Homes in Rental Areas? - Posted by Ben

Posted by Ben on March 05, 2000 at 12:03:00:

Carol–subject to what?