Cheap House Craze

Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. Now, let’s meet today’s expert host.

Joe: Hi. I’m Joe Lieber, and I am your host with the REI Classroom today.

Mike: This show is sponsored by PassiveRental.com.

Joe: All right. So today, we’re going to talk about the cheap house craze. We hear about it everywhere. We’ve seen it on FlipNerd. We’ve seen it on bigger [inaudible 00:00:36]. It’s all the talk, cheap houses, high returns. Is it really happening? Is it true? Heck yeah. Heck yeah, it does, especially right here in my market. I’m in Cleveland, Ohio.
Now, let’s talk about that last frontier. So the Midwest, right now if you look at markets all over the country, Cleveland, Ohio and all through that channel down to Birmingham, Alabama, this is really like the last frontier of these inexpensive houses where we’re getting that Midwestern, blue collar, great opportunity real estate products. So does it work, once again? Heck yeah, it works.
I have clients all over the world that are buying here in Cleveland, Ohio and making an absolute killing. I personally own 162 of these ATM machines, and I say that because I am an active investor. It works very well. I always tell folks, “If you’re going to get into this, just invest with people who are active real estate investors and do what you are trying to accomplish.” Success leaves clues. Am I right?
So how can you get involved? How can you get involved in the cheap house craze? Well, look around out there. Listen to your podcasts. There’s a ton of them out there, people talking about this. If you have bigger pockets, meet people. Heck, I’m out here. There’s a lot of ways to get involved. It seems right now, the threshold is about $35,000, $40,000 is going to get you $800 a month [and that’s in Cleveland]. What’s better than that? Nothing. It is going up, so if you’re interested you’ve got to get rocking and rolling right away in any market here in the Midwest.
So here are some great markets to look at in the Midwest. You’re probably thinking, “Where should I go?” Grand Rapids, Michigan is hot. Cleveland, Ohio, obviously. Columbus, Ohio is hot. St. Louis is hot. Birmingham, Alabama is hot. They’re all great markets.
What kind of houses should you be looking at? A lot of things are going to be three-ones, three bedrooms, one bath, 1,000 to 1,200-square foot bungalows or colonials. They’re going to be older homes. The Midwest is older. These are going to be 1915 to 1955 built homes. You have to get your mindset around that. We’re not in these newer markets, the Phoenix markets, where there’s 2005 built, everything is new. They’re older homes.
You will have CapEx. Look at the CapEx things. Make sure the roof is good, or what’s the cost going to be to replace it? If [inaudible 00:03:15] bad roof, it’s okay. It only costs $5,000 to put a new roof on. If you’re paying $25,000, $30,000 for the house, maybe it’s worth it for you to say, “Hey, I’m going to go out and invest in a brand-new roof and windows, and things of that nature. So make sure your “CapEx” we call them, capital expenditure items are well cared for, and you’ll be in good shape.

Mike: PassiveRental.com is your source for turnkey, done-for-you rental properties. If you’d like to be an investor and not a landlord, please visit PassiveRental.com to learn how to purchase cash-flowing, professionally managed rental properties in the hottest rental markets across the country. We can also help connect you with financing for your next property. Invest the easy way today and get started by visiting PassiveRental.com.
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