“Low income” doesn’t mean “low profit…”My wife and I got into the real estate investing business with the intention of doing two things: 1.) We want to retire early and see the world, and 2.) We want to teach our 11-year-old son from an early age the value of investing wisely while working hard to achieve his goals.
We started out flipping houses as a way to build up cash for larger investments. We had dreams of “one day” owning a large luxury apartment complex that would generate endless streams of cash flow for us. We soon realized that if we waited too long, that “one day” would never come. So we kind of jokingly started looking at low-income housing.
The first hurdle we had to face was our own mindset that “low income” meant low quality of tenants. We found out that “low income” doesn’t mean anything other than that.
We purchased a 12-unit “low income” complex, and we couldn’t be happier. The units are very simple. They don’t have dishwashers or granite counter tops, which actually means fewer headaches for us. They are all clean, and the tenants are all decent and work forty hours a week just like anyone else.
They were very appreciative when we came in and painted all of the buildings and began making repairs. We found out that if we showed them that we cared about our property, they would too. We have great tenants, and the return on investment for a low-income property is approximately 50% higher than any of the high-end properties we were hoping for.
We don’t even look at high-end rentals anymore. We’re going to buy all of the low-income housing we can find.
[This is Sammy’s third Success Story. Read his first two: Who Says You Can’t Make Money and Taking My First Steps Toward Financial Freedom.]