first off, this is why you hire experience property mgmt. to collect the rent and screen tenants (don’t rent o the first dude who can sign his name to a rental app.)
second, just becuase its in a “bad” neighborhood does not mean every tenant is a deadbeat. I have owned properties in a broad range of neighborhoods; the deadbeat factor is not too different; when people don’t pay rent they always have some “good excuse” whether they make $20k or $120k per yr.
Oh so true. And ANY great tenant can BECOME a bad tenant if they lose their job.
what kind of area sells for a 3.62 GRM ($37,000 / $850 monthly gross income). are rents really that high in this area?? why doesn’t the tenant just buy it with no down and save himself/herself $500 per month??? if he’s been paying $850 per month, any lender will probably make a loan.
do many lenders make 100% LTV investor loans???
sounds like a great deal though. wish it was out in californica but i bet it’s east st louis or someplace like it!
<<what kind of area sells for a 3.62 GRM ($37,000 / $850 monthly gross income). are rents really that high in this area?? why doesn’t the tenant just buy it with no down and save himself/herself $500 per month??? if he’s been paying $850 per month, any lender will probably make a loan. >>
My GRMs are not quite that low but are in the 6.00 to 8.00 range. Rents are strong here against purchase price in the right school districts. Where I am, there is a large military base which I target for tenants (I’m retired military). Most of them gety paid a decent Housing Allowance but don’t want to buy because their assignments are generally for just 2 or 3 years. The appreciation is a bit sluggish here, so they don’t stand to make a great deal of money when then sell after a relatively short period of time. But, they are superb tenants – usually clean, orderly, adjusted to following rules, ALWAYS pay on time, etc…just one reason why they don’t buy. There are a myriad of others.
<<do many lenders make 100% LTV investor loans???>>
The lender that I generally deal with will make me 100% LTV investor loans (I have really high credit scores) but I chose to go with 80% to alleviate the need for MIP.