By your description of the area and the fact the seller will not carry financing,I would pass on this one.

Little probable appreciation. Likely bad tenants. Repairs likely more than you anticipate. Seller likely hiding problems. Bad area likely getting worse.

What's to like except possibly cash flow.

Sounds like this is a Class C house and you're used to dealing with Class A/B houses. There are several of us that deal in Class C and they can make you a lot of money. The only advice I will give you is that the cost of aspirin tends to be a lot higher with Class C's. I wouldn't shy away from it because of that (obviously, that's 85% of what I have), you just have to know what you're dealing with before going into it.

Are you considering the situation forwards or backwards? :)

The forwards-thinking way is, "Who do I want to rent to?" and then buy the house they want to live in.

The backwards-thinking way is, "Ooo, here's a house I can buy-- now I have to find someone to live in it." :) That way is more likely to end in a headache--- because the people you want to rent to may not want to live in that house, in that location, and the people who do want to live there might not meet your standards.

If you're genuinely okay with swimming in the "rougher-part-of-town" pool, that's a good enough reason to consider an experiment. But if your motivation is, "Ooo, I can get a house for under $50k over here!", then it will probably be the most expensive cheap house you end up buying. :P

Some of us don't get to be picky-- we're forced to grow where we're planted. We get to buy what's available, and rent to the tenant pool that exists, rather than targeting our ideal business model. That can either result in very, very expensive initial purchases, and very, very desirable people paying very, very desirable rents, or it can be pretty rough-and-tumble stuff. It all depends on the specific circumstances of your situation.

When I do cash purchases, I always close through my title company. I remember the first time, I showed up with the full amount in cash-- and the title company politely explained that for anything over $x, I needed to conduct the transaction with a cashier's check-- the government prohibited them from dealing in cash. :P

Who do you normally rent to?

How much do your houses normally cost?

How much does your rent usually run?

Who would you expect to rent this house?

How much do the houses in this neighborhood normally cost?

How much is the monthly rent for such a house in this neighborhood?

All that said, working class neighborhoods are awesome. The tenants generally aren't demanding; they don't expect expensive finishes; your dollar stretches further. If you have $200k to spend on real estate, you can get 4-10 houses, easily... which spreads out your risk. The rents are humbler than expensive rents, and the tenants do require more hands-on management than more affluent tenants, perhaps. Drama is more likely to affect you. But you can either spend $200k on one house, and rent it for $2000/month-- and if it goes vacant, you have 100% vacancy-- or you can spend $200k on, say, 6 houses that rent for $500/month, pull in $3k/month in rent, and when one house goes vacant, you're still pulling in $2500 from the other ones that keep on working.

Do you know what are the 3 most important factors in RE investment?

Location, location, location.

This is not a cliche, this is reality.

Sam, if you have doubts in your mind about it,perhaps you should consider buying closer to home,even for more money........charlie

Sam,

A lot of it depends on where he is.

If he's in Plano, there's not a house for sale for less than $100k. Over in Arlington, you might be able to buy an empty lot for $50-$65k. There's a little 762-sf 2/1 ex-rental-house for sale in Grand Prairie that's been on the MLS for one day at $85k... I actually might watch that one to see how long it lasts. :)

When I was young and hungry, 18 to 40 years of age, I would buy deals anywhere I'd find them -- so long as they were within an hours drive from my home. We are talking "South Central", "East Los Angeles" and other gang infested areas.

Then I got smart. I didn't need that kind of headache. Weather I had 1, 5 or 10 million dollars in equity, my health (Mental and Psychical) was more important.

So from 40 to 50ish, I'd only buy properties that I could call home and felt safe. If I were you I'd do the same. Good luck.

Samual, it's all relative to your area.

Will you tell us what great cash flow is?

For me, a paid for rental cash flows best.