During the past couple of months, I have received numerous calls from "investors" wanting to buy fixer uppers that they then want to keep as rental income properties.
These are usually older properties that are duplexes, triplexes, four-plexes and even larger. These are not your normal residential properties, obviously.
Here is what you should ask yourself before taking on these rental gold mines:
1. Do you have the cash to purchase the property.
Usually sold at a very low price, these properties are not "loanable" so unless you have the cash or are able to get a hard money loan for at least a short period of time from another investor, this is not for you.
2. Do you have a contractor you can trust to give a realistic overview what needs to be done to make it habitable.
3. Have a roofer check out the life of the roof. This is one area that can eat up a whole lot of money for repairs.
4. Do you know where to get reliable renters.
5. Are you willing to make repairs yourself; if you have to hire out getting things done, it will eat into your profit.
Often investors of these properties "burn out" after a few years, and want to divest themselves of them. This seems to be happening right now. Several of my clients are selling, and a new crop of buyers are looking for them.
So if you are looking to invest in rental properties, please give me a call.