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Can I really buy homes in Ohio for under $10,000 and resale for a profit? Is there a catch?

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March 07 2011 - Cleveland
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next increase --> *net* increase
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March 07 2011
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Link to population estimate through 2050 from the U.S. Census Bureau, prepared February 1996.  Includes data by Age and Race as well.

(Yes, the estimate is out of date, so one should be using present growth rate instead.  This report uses a high, middle and low growth rate for comparison.)


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March 07 2011
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The U.S. population clock states 1 net person gain per 14 seconds, which would amount to an increase of 2.254 million per year, or 0.725% annual growth.

So, 1.00725 ^ 30 = 1.242 times.  With a present population of 310.947 million, that would mean an expected population growth of 75.24 million in the next 30 years.

Say we compound daily instead?

75.48 million more people in the next 30 years.

And with the retirement and death of baby boomers coming, and the government predicting less working age population to pay into social security for them?  That next increase of one per 14 seconds may be high in the near future.

In the meantime, construction of new housing has not stopped, nor is it anticipated to stop.

And that growth rate already took into account one net migrant every 40 seconds, which can't change if congress is not willing to change the immigration rules.

Even if population growth would account for all planned construction, who wants to wait 30 years to have some kind of return on investment?

Since congress is still encouraging U.S. businesses to ship most jobs out of the country, I fail to see why anyone would expect the increase in Jobs to occur in Texas.  Is anyone making lithium batteries for automobiles there?

I certainly wouldn't consider Ohio in the south anyway.
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March 07 2011
Many of these have been striped for their copper wiring and copper plumbing, heating and cooling system, along with anything else of value.  If you buy one of these and try to renovate, plan to sleep at the house with a weapon.

Once you are done putting $10K into the house then who wants it knowing if they go to the beach for a weekend they might return to a shell?  Who will lend there?  Who has jobs?

Those low purchase prices seem attractive, and many have thought, "golly, I'll take a half dozen,"  but few have made any money (I suspect).

It is a downward spiral that will change only as new jobs are added to the communities.

I've read that the US will gain 100 Million more people over the next 30 years, so housing over the long term should do ok, but the key is guessing where those people will live.  If job growth is in the south, which seems
most likely to me, then the population will cluster down there.  It is already happening.
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March 07 2011

The catch is that you will probably need to make improvements on that home for the next end buyer.  Home are priced and they sell based on what the market is able and willing to pay based on it's condition, amenities and location.

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March 07 2011
If you plan to buy them and do nothing to them and sell them again, all on the open market, the answer is no.  Think about the scenario a bit more, if you buy a place for $6,000 and put it up for $15,000 but there are still plenty of choices under $10,000, nobody will buy yours.  There is too much risk for the opportunity to make 15 or 20%.  The city of Cleveland is demolishing houses in bad condition left and right.  If you end up with a vacant lot in the process of buying then selling, you will have a property that will cost thousands to get rid of.  The only way to make money buying low and selling a bit higher is by buying low end property in pool sales from the banks.
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March 07 2011
 
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