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Ben,

I agree with your points. There are deals that are off the beaten path that are still in major markets so you can avoid some of the risks associated with different countries.

Just one example and the reason the numbers are good is because it is not common.

East coast US. Good area but economically not a place that is moving up.

Seller wanted to sell after holding it as a rental for over 10 years. His father had owned it before him. The tenant had moved out after renting for 10 years. The landlord had never raised the rent during the whole rental period.

Annual gross income (projected based on market and not the figure from 10 years ago) $4,800

Asking price for a 2/1 SFR with dry basement (2 story home) $14,500.

You could improve it or you could clean and paint and rent as it. I would say the kitchen cabinets needed some work as one of the doors did not match the others (paint or replace).

The gross yield would be over 30%. Way past the 1% or 12% rule that some folks like to use as a screen when hunting for yield properties.

Yes, the price would fit on a credit card. It was below market but not that much below. Priced for a cash sale. More or less has to be as you can not obtain a mortgage at such low numbers (too much work for a traditional lender).

I would have purchased it if there was not a buyer already in front of me.

I can find other such deals so I was not that concerned. This was better then most.

BTW - My range is a bit extreme. I sold a 1 bedroom loft last year for around $1.25M. I say around as it is in London so the deal was priced in Sterling so I am using the approximate exchange rate for when the deal was done.

John
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