Newbie question: where do I find cheap houses for investment (rent out)?

Hi all,

Could you please point me to some web resources?

Specifically, I am looking for cheap houses in the mid-west of the US… (I am currently located in Chicago and I am looking at the Illinois, Ohio, Wisconsin, etc. )

Thank you!


That is THE million dollar question that separates success from failure in the real estate business, at least in my area. One of the primary rules of real estate investing is “you make your money when you buy” so if I don’t buy not just cheap, but dirt cheap, I don’t make any money.

In my experience the dirt cheap properties are those that are not on the market yet and are purchased directly from owners. I’ve yet to find a short sale, REO, FSBO, or MLS listed property that makes financial sense. Other investors and other areas may have different experiences.

I deliver “We Buy Houses” flyers to my target areas, conduct driving for dollars looking for run down properties followed up by letters to the owners, search the public records for out of state owners in my target areas, and search through the records in the county surrogates office for likely estate sales.

Great Post… You always make money when you BUY!! So many time’s that is where people lose site of the Real Estate Investing venture. Back in my younger and dumber days I bought sometimes just to buy. Well when you end up with a ton of non cash flowing properties you will get CRUSHED! Find a deal and buy it! Or don’t find a deal and flip it! HUH?? Example I am not a huge sub2 guy personally yet if I find a good sub2 deal I am not going to just walk away from the property all together, personally I would rather make $2,000 on 10 deals a month rather then make $20,000.00 on 5 deals a year. My business I get paid no matter what the Homeowner decides to do with the property. Keep it I get paid sell it I get paid. Just know that if you are seeking investments to hold YOU MAKE YOUR MONEY WHEN YOU BUY, And WHEN YOU SELL (Hopefully) I almost lost my shorts when the economy shifted and I was holding on by a hair… I found myself in a position where after all the ARMS adjusted and we cashed out at closing we were going thru just over $18,000 a month just to break even. Well we got out of that and now we have 11 rentals free and clear. To be honest I really don’t care if I EVER own another property personally. OWN NOTHING CONTROL EVERYTHING… WOW I got off topic!

In my experience $2000 on any deal is just too skinny for me to take the risk. Even $20000 can be risky. After 4 months on the market I dropped the initial price of my last flip $30000 to get it sold and still made $70000.I had almost $300000 of my cash tied up in that property. On the properties I keep for rental I need to be into them no more than about 65% of FMV after all repairs in order to hit my goal of a 10% COC return. Maybe this is why I have such a hard time finding properties worth buying but I consider myself a real estate investor, not just a real estate owner. What this really translates into is that you need to know your goals and know your market and know how much to compromise on each. I’ve watched several properties that I tried to buy sell at what I considered a much too high price to overeager investors and I’d be surprised if any of these investors broke even on those deals. There’s a couple I KNOW lost money by buying too high.

I am curious…

Where in Chicago are you located?