# Are $100K Rental Properties EVER Worth It? Source: https://www.youtube.com/watch?v=h5US0gze31Y Recap page: https://rapidrecap.app/video/h5US0gze31Y Generated: 2026-01-28T14:45:50.343+00:00 --- ## Quick Overview Properties under $100K are worth buying if the underlying math supports profitability and the condition allows for stable tenancy, as low price alone is not a reliable indicator of a good deal; investors must focus on the age and condition of big-ticket items rather than the arbitrary price point. **Key Points:** - The decision to buy sub-$100K properties is relative to the market, as areas like Detroit offer decent homes under this price, while markets like NYC or Washington D.C. do not have such options available. - The critical factor for low-cost properties is their condition, specifically the age and maintenance of big-ticket items like the foundation, not just the purchase price; one speaker noted selling a sub-$100K house because the foundation issue made it feel like walking through a funhouse. - Investors should base decisions on whether the numbers make sense, such as a $70,000 property needing a $100,000 renovation that rents for $2,500/month, rather than focusing on an arbitrary price line. - Some investors, like Henry, buy properties for under $100K but plan significant renovations; one example cited buying for $80,000, spending $60,000 on rehab, with an ARV of $250,000. - Flipping properties off the MLS is considered smart business when investors take on risk, provide needed rehab, and boost neighborhood values, although gentrification through outrageously high resale prices is discouraged in favor of revitalization. - To improve cash flow, putting more than 20-25% down is a good strategy, especially for those prioritizing debt-free ownership over optimized total return in the short term. - Hard money lenders must recognize that investors are the prize because lenders depend on investors having deals; lenders should act like they are in customer service and implement tiered processes that reduce hurdles for experienced investors. **Context:** Dave Meyer and Henry Washington from Bigger Pockets discuss the viability of purchasing real estate properties priced under $100,000, addressing common investor confusion regarding their profitability and ethics. The conversation also branches into the ethics of flipping properties acquired through the MLS and preferred strategies for financing, including down payment amounts and frustrations with hard money lenders. ## Detailed Analysis The consensus on sub-$100K properties is that they are not inherently good or bad; their value depends entirely on market context and the underlying math, not the price tag itself. Investors must scrutinize the condition, especially major structural components, as cheap properties are often cheap for a reason that incurs future costs. While some investors aim to buy properties well under $100K and force appreciation through heavy renovation (e.g., buying at $80K, spending $60K rehab, aiming for $250K ARV), others target a unit cost of $100K to acquire multi-unit properties for better scaling and cash flow management. Regarding flipping acquired properties off the MLS, the speakers argue that investors provide a necessary service by revitalizing distressed homes that traditional buyers avoid, provided they focus on revitalization rather than price gouging neighborhoods. Furthermore, prioritizing cash flow often means putting down 25% or more, or even opting for a 15-year note to eliminate debt faster, aligning with long-term retirement goals. Finally, Henry strongly critiques hard money lenders who adopt an arrogant stance, insisting that investors are the prize because lenders rely on the deals investors bring, and lenders should evolve their processes to accommodate experienced operators rather than imposing rigid, time-consuming controls. ### Sub-$100K Property Viability - Value depends on market context and math, not price - Condition of big-ticket items like foundation dictates success - Investors should focus on profitability metrics over purchase price thresholds ### Flipping Ethics and MLS Acquisition - Flipping distressed homes provides needed inventory if done responsibly - Investors capitalize on deals traditional buyers overlook due to fear of lowball offers - Focus should be on revitalization rather than gentrification via extreme price premiums ### Financing Strategy - Higher down payments (over 20-25%) improve absolute cash flow by reducing interest paid - Utilizing a 15-year note alongside a larger down payment accelerates debt payoff for long-term security ### Hard Money Lender Critique - Lenders operate in a service business and investors are the prize, not the supplicant - Rigid processes, especially concerning draw requests, alienate experienced investors who then seek private lenders - Lenders should implement tiered underwriting based on investor experience rather than blanket controls.