I have an opportunity to buy an investment property for $50k that rents for $1,350 to section 8 housing. Tenant has been there for 5 years and does her own repairs and mows the lawn herself. Issue is the house needs some minor repairs like new flooring and new paint. However, she wants to stay as a tenant and does not care about that. It will need about $15k worth of work if she ever leaves, but by the way she’s living she loves staying there. Continued in comments…

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Id do it and if you dont want to DM me the details and if I buy it ill give you a 1k as a referal.

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I’ll give you 2k!

Where is this? 50k for a place with 1350 rent gives off too good to be true vibes but based on your details this sounds like a no-brainer.

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I would do it in a heart bit. Let’s say you put 15 K more in repairs. Your cost basis is 65K. Take $3K for taxes, insurance and ongoing maintenance/year. Your yearly revenue is $1350x12 - $3K. So total $13.2K/year on a )65K investment. This is 20% return. Also, depending upon where this property is, when you sell you may get more than $65K. Also you can apply for rent adjustment every year with Housing Authority.

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Where is this? Detroit?

A $50k house probably needs way more than $15k in repairs, you just know about the first $15k that’s obvious.

I’d buy a $100k house that rents for $1350 with a good tenant in there. So at $50k it’s a steal if everything you tell us is true.

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The “key things” that you probably already know:
- investment real estate trades based on cap rates and asset class
- cap rates are almost always overstated by the sellers
- amount of deferred maintenance is almost always understated by sellers
- inheriting “good tenants” are almost always not good.
- below market rate rents means plan for evictions / non renewals if you hope to raise rents to market rates
- how much you can tolerate all of this turbulence and turmoil to stabilize an asset is a personal preference

I don’t think any of that is new to you, so unless you have a specific question, I think you already know what you need to know.

I have another property in this area, but this one I could buy cash. My only real concern is the repairs after she moves out. I would get my money back after 4 years of renting it out so I’m curious if maybe it’s worth it? I don’t have to worry about finding a tenant either.

I’m curious what area this is, mind sharing?

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