As I have previously mentioned, we currently own a duplex and rent out the other half. We have been saving for another investment property and I will casually browse the listings to see what is available and we have even checked some out. Unfortunately, they are pretty expensive so we need to save a little more to make sure we have 20% down plus closing costs and still leaving us a cash reserve. I read a lot of blogs and get complete envy over the real estate pricing that other people talk about. I see people buying single family homes for less than $100,000 and 4-plexes listed for $150,000. This is so discouraging for me as we could easily snatch ones of these up but where I live, we just do not have options in that price range. Most of the ones we have looked at in town, which admittedly are a little more expensive then surrounding towns, have been around $325,000-375,000.
For fun I decided to do a little search for less expensive homes, including surrounding towns, just to see what I could find. For a single family home within my entire county, there were 2 homes listed that we not mobile homes or condos for $100,000 or less. Out of these two, one was a 1/2 hour away and looked pretty scary from the photos and the other had this is in description: “Property sold As-Is. All must sign a Hold Harmless before entering.” Um, no.
I decided to expand this search for homes listed between $100,000-$150,000. At first glance it seemed there were many more options but in reality there were only two that were not in 55+ age communities. Out of these, one was on a super busy road and although it is currently a single family home had this in the listing description: “…this is the perfect opportunity for light service industry.” Not a place I would want to live or own a rental. The second was listed “as is” for $124,900. No thank you.
There were absolutely no multi-family properties listed in my entire county for $150,000 or less. For under $200,00 there were 3 listed. Here is a summary:
a) $200,000 in the next town over but “needs a bit of TLC”. I am never sure that that means. It could be fine and just need cosmetic work or it could be a dump. Based on what I know about real estate in our area I bet it is the latter.
b) $195,000 for Single family home and a mobile home on the same lot (I do not want a mobile home as it attracts a different type of renter)
c) $192,000 for a duplex with no description but based on the photos alone needs a lot of work
Just to show I am not just being a snob, here are photos of each of these three options:
I will admit that we are a little picky as to what we are looking for because I do not want this to be a nightmare or money pit.
Here are some of our criteria:
1) Within a reasonable driving distance to our current home (preferably right in town because rents are high and it would be easier to keep an eye on and manage but we are willing to drive 30 mins if needed).
2) Is nice enough that I would feel comfortable living there for a short amount of time. It doesn’t have to be perfect, but if it is a dive or in the wrong neighborhood, it is going to attract the wrong clientele. (I currently live in one of the most diverse parts of the state but I avoid certain streets).
3) Be nice enough to price out the cheap college aged students who might not show as much respect for the property (there are stories of tenants snowboarding off of our roof before we owned our duplex).
When there is an investment property that does show up on the market in town, if it is at all decent it is usually snatched up within a week. I came across one the day it was listed and it had an offer by the next day, for more than the listing price, even though the buyer was only able to see one of the two units. Our realtor gave us an update this week and it was listed for $369,000 and closed for $373,000 within 43 days of listing with a conventional loan. It’s hard to compete.
So for now, we just continue to squirrel away money into our cash savings which is sitting making a whopping 1% interest until we can find a viable option that we can afford and fits our criteria.