When I tell people in Australia, the UK or Europe that I buy houses in America for around $30,000, I can see them doing the math. A car costs that. A deposit costs more than that.
Then comes the question. “What’s wrong with them?”
Usually, nothing. Here’s why they exist.
There are two Americas
The America in the films is the coasts. New York, Florida, California. Expensive, and getting more so.
The other America is the Midwest. For most of the last century it was the manufacturing heart of the country. Then in the 90s the factory jobs moved away, a lot of them across the border.
Whole towns lost their main employers. Wages dropped. House prices flatlined and in plenty of places never recovered.
Rents kept going up
People still need somewhere to live, and rents have kept climbing everywhere, Midwest included.
So you’ve got house prices stuck in the past and rents that kept moving with the times. That gap is the whole opportunity. You buy at old prices, and a family pays you today’s monthly amount.
These are working towns with good people. The real estate market just stalled.
Are they in war zones?
Fair question. Every American city has rough streets, and some of the cheapest houses are in places I wouldn’t touch.
We buy in working-class neighbourhoods. Some sit on the edge of tougher areas. We weigh the risk against the reward on every house, and we skip the ones where the numbers don’t make up for it.
The test I use is simple. Do families want to live here? If they do, we can sell the house to one of them.
What a $30,000 house actually looks like
Here’s one my team recently put under contract for less than that.
A little red-brick house. Two bedrooms plus a small third, one bathroom, about 1,300 square feet. The roof was replaced a couple of years ago. New furnace, new water heater, gutters, a fireplace and a big backyard.
Inside it’s lived-in. Old carpet, a dated kitchen, a kids’ room with stained carpet, which is pretty normal for a kids’ room. A tenant had been there for years.
The owner was an older landlord slowly selling off his rentals. He’d made his money and wanted out. We gave him a cash offer, as-is, with a quick close.
It’s no show home. It’s a decent, livable family home.
Why I don’t renovate
If a house is livable, I don’t paint it or replace the carpet. That’s just extra cost.
I’m not renting it out. I’m selling it to a family on an installment sale. If they want fresh carpet, they can hire a machine for a weekend. It’s their house.
That’s a big part of why the numbers work.
How we judge a deal
Three things:
- Condition. Is it livable? All major mechanicals work? No roof leaks, good foundation?
- Price. What does it cost us to buy?
- The payment. Given the condition, what would a family happily pay each month to own it?
A rougher house gets a lower payment. A nicer one gets more. Get those three right and the return looks after itself.
On my own installment-sale houses, that’s meant a net return of 20%+ on the purchase price and about $750 a month in my pocket per house on average.
My own numbers, not a promise of yours. Not financial advice.
Why the US at all?
There are cheap houses in plenty of countries. America has the rest of the package: English, the biggest property market in the world, a legal system built for investors, and payments in US dollars.
See a real one every week
My team puts houses under contract every week. The Deal of the Week newsletter sends you one of them with the photos, the numbers and how I’d structure it.
These are results from my own portfolio. They aren’t typical or guaranteed, and your results will depend on your capital, decisions and the market. Real estate carries risk, including loss of money. Nothing here is financial, legal or tax advice.
