Low Income Single Family Houses Hidden Profits
Lots of real estate investors start by buying single family houses
. These can greatly vary in price and types of neighborhoods, but which one is the best?
We explore why most people prefer single family houses.
Most people start by identifying the types of houses and neighborhoods they will work on. Lower income single family houses are preferred by most people.
My very first real estate deal was a wholesale deal in a low income neighborhood. I got a buyer the same day, and closed the deal within a week making about $12,000. Since then I have adopted most business models in all neighborhoods, and eventually I settled to lower income areas. I consistently get good deals from these neighborhoods.
Remember that neighborhoods are very important in real estate investing. Avoid war zones. Stay away from bad neighborhoods.
You will find the most profitable deals in the middle income to lower income neighborhoods. Where I live, the price range is $80,000 to $150,000. Of course this could be different where you live. I rarely move out of this zone. You can buy cheaper houses from good neighborhoods.
So why are these houses so profitable?
1)More properties
Most people live in the middle to lower income brackets and neighborhoods. Meaning you have a greater choice when buying houses. If you market targeting these neighborhoods, you are likely to get better response and close more deals.
In most markets, high end and low income houses are usually less.
These neighborhoods have more profitable deals even in bad real estate markets.
2)More affordable
You want to invest in properties you can afford. Middle to low income houses are more affordable regardless of your business model.
Of course you must aim to buy low and sell high.
They also happen to be easier and cheaper to fix. This means you can turn them around more cheaply and easily.
3)Easy to rent
If you buy and hold your houses, you are more likely to find tenants for middle to low income areas. Most people looking to rent houses are in this price range.
This means vacancies will be lower in your properties.
4)Easier to flip
Most people buying houses are looking for the middle to lower income houses. It will be easier and faster to wholesale houses in these neighborhoods.
It is not uncommon to find a buyer the same day you put a wholesale property on the market.
It should be easy to sell houses in these neighborhoods if the price is right.
The same principle applies if you buy, fix and sell. There are more home buyers for these properties. This means you have a bigger pool of potential buyers and you are likely to sell them faster, meaning you will have less holding costs and make more money.
by: Simon Machcria
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