Flipping a neigborhood

Skyler Mckinney · 2018-08-09T06:24:09-07:00

Could I hypothetically take a whole rundown neighboorhood and turn it into a highly desirable place to live, I'm talking taking a neighbourhood that homes are in the low 100's (I'm in VA beach so its almost unheard of to find a home under 140,000) and bringing it up to a high middle-class neighboorhood where homes are selling at a low of 250. I'm very new to this but I've heard alot of forced appreciation but has anyone done this. If not I really love the idea of creating huge wealth by transforming a whole area. I'm thinking outside the box here because deals are kind of rare here. Can we get this discussion going because it infatuates me? Has anyone done this before if so can you tell details on how it worked, how much your profits were, what is the risk factor, and how long did it take. I'm not in a position to do this yet as I have not developed any sort of network yet but I WILL be able to one day and I simply love this idea it sounds like there is no way to lose. I would love to hear your tactics or how you would go about this if you had the means. @Brandon Turner @David Greene Would love to hear about this on a podcast as well

Jeremy Elcox

Newport News, VA · Member since 2016 · 28 posts · 12 votes

8y

Good morning Skyler, I am still learning this as a newbie but I would think the 1st HUGE barrier would be money. While I am a beginner I have learned on here you would need to ensure a reason people would pay the new higher costs aka...a new industry or huge venue draw. Please correct me if in error but unless you fix the crime, salary, and schools you may have a challenge renting all these new high end homes you just spent millions on. Best of luck and cant wait to see more ideas. J.

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Skyler Mckinney

OP

Flipper/Rehabber · Virginia Beach, VA · Member since 2018 · 95 posts · 65 votes

8y

@Jeremy Elcox assuming I have the money. The area I am talking about is on the outskirts of town center. So these are already decent size houses and the jobs are already there mostly through the NAVY and the government. So the salary is there and the jobs are already there. Now so If I have the money and I do a direct mail campaign on two of the streets and I have 6 people out of the 20 houses willing to sell. So now I have 30% of the neighboorhood turned correct? So does this not force the appreciation of the neighborhood to go up. So now the taxes go up so rent goes up and the neighbors see that home values are going up and ready to sell their houses. I do my mail campaign again but with a higher buy price and I get another 6 and flip them. So now that's 6 houses and I can either sell them for almost 3x what I bought them for or now I decide what rent will be in this neighboorhood. At this point, I'm starting an HOA to keep up with appreciation. In theory should this not chase the crime out of the streets? Is there anything you would add to that or do differently is there any sure-fire way to keep crime out of an area?

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Teri Feeney Styers

Real Estate Agent · Grand Junction, CO · Member since 2015 · 1k+ posts · 736 votes

8y

@Skyler Mckinney there are quite a few "assumptions" in your math - but let's go ahead and dream. Do you have other flippers that you network with? I would try to get 2-6 others on board and tackle a block together. Not as in combining funds - but as you fix these two houses and someone else fixes a different set, etc. Maybe create an informal neighborhood organization with a set of goals and mission statement... maybe do some reading about Detroit and a few other rust belt cities that are tackling this with good results. Good luck!

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Jeremy Elcox

Newport News, VA · Member since 2016 · 28 posts · 12 votes

8y

@Skyler Mckinney, Good afternoon sir. First of all great work and much respect trying to improve yourself. Second, I understand you might be able to cover the costs of rehabbing and buying said property. My biggest question is this, can you ensure that you can either rent or sell these now higher value properties in an area that already has a set market value. Just because you rehab to a nicer and prettier home does not mean that the local market will support the higher price point. From my extensive reading this is a VERY common mistake new investors make...myself included. Just because we put in marble counters and high end flooring does not mean you can raise rent 300 over market for the area right away. I would like to see some more ideas here and if I am way wrong please tell me. Best of luck, J

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Samuel KochPro Member

Realtor · Virginia Beach, VA · Member since 2017 · 11 posts · 3 votes

8y

Hey @Skyler Mckinney 👋 I love your passion for real estate.I live in Virginia Beach as well and something to consider in an area as established as ours is the difficulty you would run into selling a $300,000 house in a $150,000 neighborhood. I have seen builders do this in our area and these houses tend to sit on the market for a looonnnggggg time. It is definitely possible, but the question here would be how long would it take to reach the level of appreciation that you are looking to achieve. I believe it is easier to find the worst houses in a neighborhood and bring them up to the surrounding standards.

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Flipping a neigborhood

Flipping a neigborhood

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