Dr. Toby PotterCEO and Founder, The Unshakable Investor · Real Estate Investor Success Coach

The worst houses to buy as investment properties

Name: The worst houses to buy as investment properties
Uploaded: 2025-05-27T22:21:50+00:00
Duration: 1 min 4 s
Channel: Dr. Toby Potter
Description: In this video, the hosts outline three types of properties that make poor long‑term rental investments. First, they discuss a high‑end home in an…

27 May 2025 · 1 min

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1:04

In this video, the hosts outline three types of properties that make poor long‑term rental investments. First, they discuss a high‑end home in an expensive neighborhood that requires a 50%+ down payment to achieve cash flow, making it financially inefficient. Second, they describe a modest‑priced home in a low‑rent area that still demands roughly 35% equity to break even, again limiting profitability. Third, they point out a well‑maintained house in an average neighborhood that offers no opportunity for value‑adding improvements because it lacks extra land for an accessory dwelling unit (ADU). The conversation then shifts to the essential criteria for evaluating rental purchases—valuation, demand, and the spread between mortgage costs and rent—to ensure positive cash flow. The speakers stress the value of working with an experienced coach who can analyze deals and guide decisions, and they close with a call to action for viewers to engage with the content.

Chapters

Here are some of the worst houses to buy as a long-term investment property. Here's an example of property here that is way too nice and is also in a very expensive neighborhood. So in order to cash flow, you usually have to put down 50% or more to cash flow in a very expensive neighborhood. Here's an example of property here that's still relatively very nice still, but it's in the area, you guys, that's actually the price point very lower. And in this area, the rent is also very low. So in order for it to cash flow, you're going to need probably 35% and more. Here's another example of a property in relatively good condition and is in an average neighborhood. But you can't add no value to this because look, usually people add ADU on their land. Well, there's no more land to this property, so you can't add no more value.
So he's got a really good point. And this is one of the things that you have to do when you're looking at buying rental properties. Is there valuation there? Is there the demand there? Do you have enough spread in your purchase, your mortgage, and the rent to have positive cash flow? This is why it's so important to have a coach. So important to get with somebody who knows what they're doing, can look at it, analyze it, and then educate you on what is the right decision to do. So if you like what you're hearing, like, share, Leave me a comment. Let's get together. Talk to you soon.