Should I buy a cash flowing duplex in St. Louis???

15 Replies

Hi, I was contacted by a seller in St. Louis, MO that wants to sell me a brick duplex that is cash flowing $1,250/m. I've never been to MO and have very little knowledge of the market. I have only done deals in Atlanta and Florida. The price is low enough for me to take it down however, I'm uncertain and don't want to end up with a lemon. Anyone buying rentals in St. Louis zip code 63112 please share with me some market knowledge, it would be greatly appreciated. 

Thanks in advance,

Carl

I am not from St. Louis but based on what I just read, this sounds bogus. Who cash flows $1,250/month on a duplex. Even these BP investor gurus don't get half as much. Does the seller know what cash flow mean? You are telling me after you pay PITI, water & trash, set aside money for vacancies and repairs, you are left with a whole $1,250/month to do whatever your heart desires? That is what I call a unicorn. I can see that kind of cash flow from a 5 unit or higher property but not from duplex. Call him again and have him send his numbers, then you contact a REA in St. Louis and ask him/her if those numbers make sense.

Originally posted by @Brian Adzadi :

I am not from St. Louis but based on what I just read, this sounds bogus. Who cash flows $1,250/month on a duplex. Even these BP investor gurus don't get half as much. Does the seller know what cash flow mean? You are telling me after you pay PITI, water & trash, set aside money for vacancies and repairs, you are left with a whole $1,250/month to do whatever your heart desires? That is what I call a unicorn. I can see that kind of cash flow from a 5 unit or higher property but not from duplex. Call him again and have him send his numbers, then you contact a REA in St. Louis and ask him/her if those numbers make sense.

 My thoughts exactly. Get all the numbers and confirm that it's truly cash flow and if it is please let me know because I'm going to start buying in St. Louis! Based on Craigslist it looks like luxury 1bd apartments are renting for around $1,250/ month in that area and non-luxury units are closer to $800/ month. I know the city of St. Louis is working hard to try to attract more companies and a tech element so it may be on the upswing. Hopefully, leaving it's unsavory title as "murder capital of America" behind.

ck crimereports.com  some neighborhoods is dangerous.......You get rent 1st month and that is the end of your income,

I live in St. Louis and invest here. 63112 is a rough zip code. You can get incredibly high cash flow numbers around there-on paper. I bought a huge duplex with 4 bed units for $50k back in 2007, rents are $750 each unit or $1500 total. That building is very close to the zip code in question and I bet it's worth maybe $30k today. Check comps and homicide maps. Generally, anything north St. Louis is a war zone. Anyone can contact me anytime, I'll share my knowledge of the area.

I own a property in 63112. It's a very street-by-street zip code, so you'd really have to have eyes on the ground to know if it's in the good part of 63112. My property in 63112 is south of Delmar, and walking distance from Washington University in St. Louis, which is a great school with a lot around it. However, the further you get from the university, the less desirable the area. Personally, I'm wary of anything north of Delmar (outlined in red in the photo):

Feel free to message me if you want to discuss the opportunity in more detail. I'd be happy to provide my thoughts on the specific area, as well as the numbers the seller gave you.

Best of luck!

63112 is definitely an area to watch out for. Has good areas but also a lot of really bad areas. High crime and vandalism. Run the comps!

63112 is great, something for everybody! right now listings are as low as $9,000 for a duplex up to $1,270,000 for an outdated SFR.

@Megan Greathouse is absolutely right about Delmar. north of Delmar and south of Delmar are different worlds and the zip code may be the only thing they share. Like many areas of St. Louis this area is very street by street. I think of it as "quarter block by quarter block". The same street can change pretty quickly when you cross another street. As others have said boots on the ground is the only way to know.

It's not hard to find people who lost money from being misled, especially in St. Louis.

Got to have boots on the ground that you trust.

@Casey Shultz careful with this kind of general comparison of rents within a zipcode as the finish doesn't justify the rent. More likely, the location and thus the rent justify's the finish. The $800/month unit probably has a 50% vacancy rate with very high turnover and the $1,250 /month unit is a med student who's parents are both doctors and cosigned the lease. St. Louis is in fact succeeding in attracting tech companies as seen by Microsoft's new regional office in the Cortex innovation district and Pfizer's new $200M headquarters in Chesterfield. I am very positive in the long term but positive development like this is very far away from the block by block dynamics of St. Louis.

That line @Megan Greathouse drew on the map is known as the delmar divide.  It is where you will find houses selling for $1000 one block away from ones selling at $400,000.  Personally I want to see St Louis break through these barriers that have been in place for so long.  I think we need good investors to step in like @Geoff Neidenbach to start displacing the 'slum lords' that have allowed the neighborhoods to continue to operate in despair.  @Carl Brown I think we are starting to see some of this transition in the 63112 zip code. I'm sharing a map from the MLS that shows listings that sold for over $100k in the past 12 months - as you can see there are some higher value houses starting to pop up there.

@Carl Brown not sure if it's is same seller, I was contacted last week by someone trying to sell me a duplex in St.Louis as well. After talking to them, I got the feeling that it was a scam. Be careful with out of state.

This is why I posted this deal in BP! Soo many great comments from what seems to be a bunch of great people.  Thank's for all the information! I have been studying the area really hard the last few days and have contacted several local realtors who really know this area and gave me tons of advise.  I have the signed contract for this property and have about 30 days to figure things out. Waiting for title to clear. Now what I've seen is a lot of activity in this zip code. Right across the street from this property is a newly renovated apartment building

 http://www.arlingtongroveapts.com/index.aspx  

Researching the area:

https://www.stlouis-mo.gov/government/departments/...

https://www.niche.com/places-to-live/n/wells-goodf...

http://www.stltoday.com/search/?sd=desc&l=25&s=sta...

Looks to me like a solid buy and hold investment. If I decide to pull the trigger I will fly there for a week or so to analyze a bit more. However, if I don't I will probably just assign it for a small fee and get out of the deal. 

Thanks all!

@Carl Brown 63112 south of Delmar is likely okay for the reasons @Megan Greathouse stated. North of Delmar is probably block-by-block between Delmar and Page. Definitely consult with as many boots on the ground there as you can. North of Page and heading toward Wells-Goodfellow neighborhood north of MLK Blvd is probably a no-go and it looks like you're right on the edge there... here are the crime reports for the last 1 month. Crime Reports 63112 That Arlington Groves Apartments looks shiny and new, but a lot of the units may be subsidized and just go a block north of there on Google Streetview and it gets ugly pretty quickly. 

@Casey Shultz Be very careful generalizing rents in "St. Louis". It's very much block to block or even house to house in many cases. Yes, there are pockets of the city that support $1,250/month for a luxury 1BR, but one block over or across the street a lower-end 1 BR might be only $450/month, not $800. Other parts of town, $800 is what you'd get for a 1-BR with high end finishes, never over $1,000. You should also consider "shotgun" layouts vs. true 1-bedrooms as there can be a big difference in demand and price for the less functional shotgun units. 

Hey guys, so word of mouth is the best form of advertising right? The seller was very happy in the end and gave me a number to a lady wanting to sell 3 properties asap because she is getting older and has become a tired landlord. 

1. 2 unit in 63113

2. 4 unit in 63112

3. SFR in 63118

All cash flowing with value 

Happy investing!

Hey Carl. I would be interested in getting more information on the properties. Let me know what you need from me. 

Hi Naveen,

Shoot me an email to vcaproperties  at gm ail. com and you can reach me directly regarding these properties, 6 78-7  54-2 86  6 

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