Are Some Areas TOO High-Priced to Work in?
We've seen over the last few days what kind of areas we DON'T want to work in - that's for sure.
The question I've been getting is - do any neighborhoods have values too HIGH to work in?
Are Some Neighborhoods Out of Reach (Too High-Priced)?
The answer is: yes and no.
There really isn't a high limit for the neighborhoods we work. Deals happen in all price ranges as soon as you get past the houses that can't generate enough cash to pay taxes, costs, and a profit for you.
I shy away from recommending high-priced areas (where nothing is under $150,000 or so) only because:
- It will take you longer to do your first deal
- You'll likely do fewer deals (but will likely make MUCH more money on the ones you complete)
- There are just fewer houses that go to tax sale, the higher up the price scale you go
You may decide to work the higher priced areas if you're experienced and can go a while in between deals if
you have to. And you'll make a lot more exciting profits. Here's a house we bought in a $350,000 - $500,000
neighborhood in the St. Louis suburbs.
As you can see we were able to wholesale it for $110,000. Not only does
this leave a rehabber room to do a good job and make a profit - $110,000 is a lot further from $0 than $30,000.
Last I checked it looked like he had it sold at $350,000.
Don't forget to let someone else rehab these 😉
Tomorrow we'll finally go over an ideal neighborhood and I'll show you what one of those neighborhoods looks like.
Be sure to watch for tomorrow's blog post - at the end will be a contest (you'll see what the contest is then) - and the first 3 people to submit a qualifying entry, win a Kindle Fire!
Remember - first 3 to submit a correct answer to tomorrow's contest will win - so get over there, read the blog post, and put in your entry right away when you receive tomorrow's email!