The market I am buying in is probably the most unique in the country. The average house I buy costs around $5000, and rents for $300 to $450 per month. These houses need very little work, usually minor cleaning and minor touch-up work.

I am used to paying 11%, but would like to find someone out there that could beat that rate.

I offer 12 years experience, and I have a brokers license. I am an expert in buying and renting.

$5,000 average price point, WOW!! That is just unbelievable. There are properties here in Minnesota at that price, but they are typically in need of major rehab. I think your rate of 11% is very high, but that is probably more reflective of the very depressed market there. Typically I am seeing 7% here for construction loan financing.

The issue in Michigan I hear is the same in Atlanta (high taxes)

You would have to contest the high taxes tomake it worth your while or buy a whole block of houses that could later be demoed and change for a commercial assemblage.11 percent is really high.

I actually have friends doing the same thing in Cleveland - buying houses under 10k, then Section 8 for 500-600/month. They just do it all cash, get their money back in 2 years.

When something is to good to be true... it probably is.. Investors would have been all over this

I went to homes.com and searched Flint,Mi up to 10k and there are several listings that come up and they don't look to bad either. Most of them when I clicked for more info came up as pending. I have been wanting to purchase a second prop here in Atl but I cant afford the 20% down right now so I think I am going to start checking out of state for a good deal.

Dayton Ohio houses are selling in the 5-8K range, much like Flint MI, Cleveland and several other areas.

Call me crazy but once you factor in all your expenses, is your net profit really worth the hassle? Your yield might be great but you would need a really large volume to even make a decent living.

This price is quite approachable. Here is the link it might be help you : http://buyhomesdetroit.com

Obviously, even if the profit margin isn't huge, it is still about leveraging your money. It sounds like you have a little gold mine of sorts up there. Kudos to you!

Unique is the right word!
There are those who argue (and probably accurately) that Flint, MI is a dying city. That said, it wouldn't matter, if you can keep a rental agreement signed and can pay off those mortgages within a few years.
The concern, however would be that you couldn't find a tenant to sign a rental agreement, and the property continued to lose value until it simply had to be abandoned.
Still, a thought-provoking scenario, thanks for sharing!

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Brian
Rental Agreement

Similar situations in lower income sections of Buffalo, NY. I have 19 houses from an inheritance that I'm looking to liquidate. Any takers? RSVP to Rob.Redanz+bob@gmail.com for more info

I own properties in Missouri, Ohio and Michigan and so far the best return has been in Michigan. My strategy is to buy and sell under my own financing, under my own terms. Holding the paper is way better then actually owning the property. I don't have deal with any maintenance. It's nice for the people in the property because it's actually their house.

Yes I have bought some properties and dirt cheap prices in Michigan but they all needed rehab. I think the lowest amount I spent on rehab was $9,000. So all in all the deals make sense. Feel free to contact me if you have any questions. andrew@andrewmacia.com

Agreed. Paper>Rentals all day.