Wisconsin Ba…, Home Buyer in Milwaukee County, WI

is it a good idea to buy real estate in a cheap area?

Asked by Wisconsin Badger, Milwaukee County, WI Wed Sep 7, 2011

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9
Everyone will tell you that the most important thing about real estate is "location, location, and also, location".
1 vote Thank Flag Link Wed Sep 7, 2011
Alan May, Real Estate Pro in 60201
MVP'08
Contact
I'm an investor, and I'll take a more nuanced approach. I don't blindly buy into the "location, location, location" mantra. Although location is important, any property on Earth can be a good deal if acquired for the right price. Like Tim, I know of investors who have purchased properties in war zones cheaply, and they lost money on their investments. Yet, I also know of others who purchased in war zones, and they made a killing. Similarly, I know of investors who purchased properties in the most desirable areas, and they lost their shirts too. And, of course, I know of others who purchased in those desirable areas, and they made a killing.

Here's a little dirty secret: the exit strategy is at least as important--actually more important IMHO--than the location.
0 votes Thank Flag Link Thu Sep 8, 2011
4564 N 27th St
is the property adress.
4 family
$47,000
each unit 2 bedroom 1 bath
propertys in descent shape.
heres the URL
http://www.homepath.com/search.html?ms=&zip=&xs=&…
0 votes Thank Flag Link Thu Sep 8, 2011
Wisconsin,

Many buyers make the mistake of seeking value in a location that is a seriously declining area. Simply stated, if there are many home priced in the very low range, it's likely that these home values will continue to be at the lower level.

With that said, good opportunities represent more than a great price and buyers like yourself should be concerned with future value.

It has often been said that best opportunities are seen as the "least desirable home located in great neighborhood."

Remember the three most important features when considering purchasing a home:

LOCATION, LOCATION, LOCATION...........

Good luck,

Bill
0 votes Thank Flag Link Thu Sep 8, 2011
Something cheap in an expensive neighborhood makes more sense.

Best,
SuZ
PML
of Longmont, CO
720 810 0683
0 votes Thank Flag Link Wed Sep 7, 2011
No, it isn't. I've seen several investors get burned doing this. They are usually from larger cities. When they look at this city, they find real estate prices are cheap and will buy in these areas.

They will fix up the property and try to increase the rents. Sooner or later they will attract a renter. If crime is high in the area and the renters don't feel safe. They will leave. The only renters they can get in the area is the ones that trash your place.

The new invester will not be able to keep renters, rent the home and it will be difficult to sell since it is usually a high crime neighborhood.

My old boss, an experiences real estate investor and a real estate appraiser for 20 years, tried this with a very larger apartment complex. It didn't work and he lost thousands of dollars and decided it wasn't a good idea throwing good money after bad. Don't do it.
0 votes Thank Flag Link Wed Sep 7, 2011
Alan,
You forgot LOCATION!!!

W. B.
When the Market appreciates 5%, it does not do so EVENLY; some go up 3% and some might go up 7%.
There's a reason for this. Think about it.
0 votes Thank Flag Link Wed Sep 7, 2011
You are saying cheap area... I guess my first question to you would be what do you mean by cheap? Are you looking to get a loan? Are you looking to live in this home? Lots of questions need to be answered before anyone could answer this questions. You can purchase a home that is way below the current value in all parts of Wisconsin at this time. Lots of short sales and foreclosures. Main concern would be are you getting a loan to purchase this home. Some of the home do not qualify for a FHA loan. So best to get with a real estate agent that will help you determine what will work best for you.
Debby Thompson
Homestead realty Inc
debbytrealtor-milwaukee@yahoo.com
0 votes Thank Flag Link Wed Sep 7, 2011
Hello Fellow Badger!

As just stated by Alan location is key! But to dig deeper into what you are looking for is this for yourself? A rental? "Cheap" areas are usually less than desirable neighborhoods....higher crime, more rentals than owners. If you are ok living in a neighborhood like that and are just looking for a low purchase price than so be it but looking longer term your property will not appreciate like it would in a more desirable neighborhood.

On the flip side with the current foreclosure situation there are opportunities to purchase a cheap home in a nicer neighborhood. The home would most likely need work but your sweat equity and improvements would pay off faster than they would in a not so desirable neighborhood.

To fully answer your question more information is needed as to what are your needs and wants and ultimately longer term goal with this purchase.

Please feel free to contact me anytime.

Troy Miller
TOTAL Realty
414-333-3723
troymiller@totalrealty.com
0 votes Thank Flag Link Wed Sep 7, 2011
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