My Pursuit Of Cash Flowing Real Estate
As I’ve mentioned in some previous posts, I’m on the look out for a distressed property that can provide some cash flow opportunities. While a vacation investment property is probably too good to be true, I believe a cash flowing property is a definite possibility.
I don’t think real estate has bottomed; therefore, I’m definitely not going to rush into any one property. As I mentioned before, I think it may take several legs down to sufficiently demoralize the public from dabbling in real estate. When I have multiple people telling me that I’m nuts for considering investing in a property, then I will know I’m near a bottom.
So, what am I looking for?
Due to a lack of capital, I’m mostly looking in the condo market. Because of the absolute glut of supply and terrible situation many condo owners are in, I think this might be the best place to get a very low priced property (I’m talking under $100k). Many condo units are bank owned which may help my cause.
The two most important factors are location and price. Notice that quality, year built, etc. are not the most important factors. In fact, I’d probably rather have an older, crappier unit because it will cost less. A fantastic location is very important, however, to ensure a good enough supply of renters wanting to live in my unit. By securing a very cheap purchase price, I can hopefully undercut the rental rate of most of the other owners (becasue they purchased at a much higher rate) and still get decent cash flow.
Interestingly, I’ve inquired on several properties that fit this description and there are some definite possibilities. One complex where units were going for $300k a few years ago has a couple units under $100k. These are 3 bedroom units in a great location. One bank owned unit just went for $78k. At that purchase price, cash flow is almost gauranteed.
For now, my search continues. I hope that a cash flowing property will add a third income stream to my financial picture (in addition to online income and my career).