need some advice

please have some patience since this my first post on any forum, I am looking to invest in real estate because I am tired of the lay-offs and general grind of working for someone,( I am in a trade union),anyways I saw some houses advertised in the Buffalo, western N.Y. area advertised by the numbers are 41,000.00 for a house with a section eight tenant , 700.00 a month rent 70.00 month taxes, ins. 30.00 month, 20.00 a month sewer. I could pay cash , does this sound like a good deal?I live in the Boston Mass. so I would have to have them manage the property but they want 10 percent of the monthly rent which I think is high, any advice from you real estate pros is appreciated

Since you live out ot state and have never managed a rental property, you should consider a 10% management fee a bargain.

I have property in several areas of the country, all annual rentals. My property managers charge between 7% and 12%, although one tried (unseccessfully) to raise his rate to 15% recently.

sled dog,
Thank you for posting on REI Club. This site was my first experience writing to other people on the computer on a general forum like this. It has been very valuable and I feel connected. I hope you have the same experience.

My first thought is: Why not invest in your own area? We have relatives in Methuen, and Nashua and I know prices are high there. But you could manage them yourself, thereby learning a great deal more and also keeping more profit.

If you don’t currently own a home, now could be the time to buy a 2-family. Are there foreclosures in your area? So you have 40K for a downpayment or purchase? Can you safely invest that now or do you need it in case of lay-offs? How is your credit? Will a bank lend to you?

So, my advice, for what it’s worth–
!. Don’t buy out of area unless you REALLY have experience already in real estate
2. Find a local real estate investment club and start going
3. Read through all the various threads here going way back. This is an incredible free education with mentors just a key-stroke away. Put in your hours learning.
4. Start reading your local papers, want ads, call on signs, just get a feel for what is happening around you
5. Answer my above questions and others should give you their advice too. There are many ways to invest and create secure cash flow.

Good luck,

Sled Dog,

Here’s how I see this deal:

Gross rents: $700
Operating expenses: $350
NOI: $350

Mortgage ($41,000, 30 yr, 7%): $272

Cash flow: $78 per month, which is a little too low for me (I insist on $100).

The real problem with this deal is that you live in Boston and the house is in Buffalo! Being a long distance landlord is VERY DIFFICULT and you MUST find a competent manager, which is easier said than done.

If your goal is to replace your job with a rental property business, then you need to own the rentals where you live. That means either finding good rentals in your area or moving to an area where you can operate a successful rental business.

Good Luck,


thanks for the replies, I do own a home with equity and I have some other assets I can liquidate so I can get started, just need to find the right deal so I can get going, I am also looking at real estate clubs and I will be going to one of those meetings soon, once again thanks for the help and I will be posting soon I hope

The purchase price of 41 k for a particular unit that has revenues of 700 a month turns out to $8200 a year. On the surface it seems like a great deal. Going strictly by the numbers, it seems like it would work. However, there are other factors to consider such as your location and non experienced of rental situations, quality of managing company, and your financial situation. Even though the numbers work, when considered, the factors that I have explicitly listed will determine if you accept the deal or not. Solely based on the information you gave me, I would not do the deal.