Posted by GL(ON) on February 22, 2002 at 09:54:24:
A town in a temporary slump, or with some sort of crisis, is the best place in the world to buy. Provided the slump or crisis is the type that will blow over in a year or 2, not a chronic problem that won’t go away.
You should be able to buy all the property you want at deep discounts (20% to 50% off or more) and low or no down payment. The problem is to keep them rented, but you will be able to offer cheap rent since your cost is low. As long as you can keep them rented (cash flow) time will bail you out.
How much can you make? Well you say houses formerly $80 to $100K are now $50K. Let’s assume that’s the best you can do, and let’s assume that prices only come back to their old level, no higher. If you buy one house you will make minimum $30,000. ($80,000 - $50,000). If you buy 10, $300,000. If you buy 33, $1,000,000. How rich do you want to be?
This is the kind of place where you find motivated sellers, nothing down deals, and positive cash flow on the rent.
Does it really matter if it takes 1 year, 2 years or 5 years for the economy to recover? As long as you can buy for nothing down with a positive cash flow?
And there is an excellent chance that when the town recovers, real estate will take off, and your profits will be multiples of what I have shown, in a few years.