OfflineOk, I am going back and forth with my decision on a few properties.
They are multi units in a not so good neighborhood. all 3 family. the properties are no older then 03,prices are a steal and cash flow would be over 1k a month on each place. I am asking myself if i really want to deal with a property in that area. It would be sec 8 housing, which doesn't bother me. If I use HML to buy them all which would come to around 550k ( thats 3, 3-family buildings) I am worried my broker won't get a bank to refi them so i can pay off the HM fast.I am going to call my broker tomorrow just to enquire and have him feel around. But the same question keeps bothering me, DO I WANT TO BUY IN A BAD NEIGHBORHOOD?? The cash flow is tempting me.But the problems that may arise are on the back of my mind.
Please feel free to put your thoughts on the pro's and con's of this.
I Want some input from the family.
Posted on: Mon, 08/31/2009 - 02:13
I Want some input from the family.
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How bad of a neighborhood are we talking about? War zone area? Gang infested? Here is the thing... you can almost get the same amount of rent for crummy area as you can for a great area, however, when you buy in a great neighborhood you pay great neighborhood prices AND there is no guarantee that you're going to have better tenants. If the price is right and it cash flows, buy it. If you don't want to deal with tenants than hire a management company. The good thing is that you're using sec 8. They have strict guidelines for people in their program. If they get landlord complaints than they cannot be a part of the program. You can use this to your advantage, keeping the tenants under control.
KimmyJ
Press on...
I don't know where it is at, but it sounds like you know that it is a great deal. I say go for it and as KimmyJ said let a management company run it for you. You could always find an investor to flip it to. I'm sure you will make the right decision for you. Keep on investing.
Brian
Its great your looking at all types of deals and especially a deal that produces a positive cash flow is tempting to consider. In the neighborhood you describe you need to find out is it steady, improving or declining. If it is not even slightly improving your properties could actually depreciate in value as they get older and the community does not get better. Thus, look at all the factors and base you decision on the numbers today and try to forecast what the future holds for that area. This should guide you in the right direction. Believe and Achieve!
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thanks all, The neighborhood will be improving in time as they built all new homes in the area. the problem is the market fell and the builders let the banks foreclose on these homes. They built up the whole peninsula, waterfront beach area, they actually made new roads and everything, yes there is some gang activity in the area but it has slowed down as far as shootings go.
. Man I love this stuff!!! There is so much opportunity out there that my head is spinning!!!!
Well after hearing your opinions, I think i will go for it as long as my broker asures me he can get me refinanced.
I just am working on getting a flip in a great neighborhood too as well as wholesaling for this new guy i met. But I want to get some rentals to hold.
I may be trying to do too much at once but it all seems so good
Good luck to all
Richie.
I would do what kimmyj suggested used a managment company you can even put security cameras so they wont vandalize the property.
I should know i lived in a bad area almost all my life.
And when time goes by some areas tend to change because the community get fed up with the crime.