Midlothian, VA · Member since 2013 · 130 posts · 17 votes
Hello,
Wondering if anyone in the Central Virginia area was investing in inner-city Petersburg or Hopewell? Specifically, doing Section 8 in the lower-priced, rougher areas? I currently have rentals in Richmond (have done Section 8 there inner-ciry), but was thinking of trying out Petersburg. Richmond is way overheated right now.
Tossing around either Section 8 or maybe doing fix and flip to other investors and I carry the paper.
We invest in Petersburg, and have gotten a lot of great deals and have some great tenants. Everyone seems baffled, but for some people it's a desired location, or they don't mind the 20-30 minute commute! Personally, I wouldn't do section 8 unless it's an ideal tenant, as in general we just prefer M2M leases. I wouldn't do a flip there either-- just rentals.
The government/city of Petersburg is a crapshoot-- it's so poorly managed, it's embarrassing.. their fundraisers are embarrassing..... e everything about how the government is ran-- is just a joke. .. gosh even their holiday decorations are embarrassing! Property taxes are VERY high ($1.35 vs. .80 in Henrico) .. To do well in Petersburg, you have to really know the streets/areas/reputations, and IMO isn't for a passive investor. A lot of people get burned just throwing money down there, not realizing they are buying 1 block from a ghetto or section 8 housing complex. Rents are comparable to the east end ($750-$1000). It's not an appreciation play IMO, although all of ours have doubled or more in equity. The people and mindset is different-- people aren't looking for granite, they want nice, cheap rent.
I would strongly recommend staying away from the sub $20K category, they're cheap because of deferred maintenance.. sometimes it's a great deal, but majority time it's because a house needs $20-$40K+ work.
Wondering if anyone in the Central Virginia area was investing in inner-city Petersburg or Hopewell? Specifically, doing Section 8 in the lower-priced, rougher areas? I currently have rentals in Richmond (have done Section 8 there inner-ciry), but was thinking of trying out Petersburg. Richmond is way overheated right now.
Tossing around either Section 8 or maybe doing fix and flip to other investors and I carry the paper.
Thoughts?
I have looked at Petersburg off and on for years, mostly in the nicer (well relatively) areas. Had a duplex under contract a couple blocks away from downtown but it ended up falling through
I agree Richmond prices are getting ridiculous numberswise and Petersburg does have some very cheap properties. But it’ll be a long time before any sort of gentrification reaches them... meanwhile near Fairfield and mosby getting flipped more and more in Richmond. Petersburg is tempting... buy a couple city blocks and use scale to make it work?
Midlothian, VA · Member since 2013 · 130 posts · 17 votes
7y
Thanks for the reply!
I've been doing some reading of recent news articles about the Tri-City area. The consensus seems to be that Petersburg in particular has a glut of vacancies and is continuing to lose population. And the tax base is in serious trouble.
My thinking was that if Detroit can be starting to turn around, than Petersburg certainly should be able to as well. Now, I'm not so sure...
Besides Ft. Lee, there really isn't any reason to live in that area, except for maybe people looking to commute to Chesterfield for work.
Hopewell seems to be trying to turn it around, and the homes seem to be in a little better shape. Plus I've read they are putting money into the downtown and riverfront areas.
Think I'm going to stay away from the sub $20k Petersburg junk and maybe focus more on the $40-$60k housing stock in the periphery.
Now to decide between buy and hold or just selling on terms and creating paper...
Yeah, I have a property by McGuire Hosp in Area 50 in Richmond. What people are asking for total fixers is ridiculous. 1% rule for investing in the 'hood? NOPE!
We invest in Petersburg, and have gotten a lot of great deals and have some great tenants. Everyone seems baffled, but for some people it's a desired location, or they don't mind the 20-30 minute commute! Personally, I wouldn't do section 8 unless it's an ideal tenant, as in general we just prefer M2M leases. I wouldn't do a flip there either-- just rentals.
The government/city of Petersburg is a crapshoot-- it's so poorly managed, it's embarrassing.. their fundraisers are embarrassing..... e everything about how the government is ran-- is just a joke. .. gosh even their holiday decorations are embarrassing! Property taxes are VERY high ($1.35 vs. .80 in Henrico) .. To do well in Petersburg, you have to really know the streets/areas/reputations, and IMO isn't for a passive investor. A lot of people get burned just throwing money down there, not realizing they are buying 1 block from a ghetto or section 8 housing complex. Rents are comparable to the east end ($750-$1000). It's not an appreciation play IMO, although all of ours have doubled or more in equity. The people and mindset is different-- people aren't looking for granite, they want nice, cheap rent.
I would strongly recommend staying away from the sub $20K category, they're cheap because of deferred maintenance.. sometimes it's a great deal, but majority time it's because a house needs $20-$40K+ work.
Investor · Colonial Heights, VA · Member since 2014 · 115 posts · 68 votes
7y
@Adrian Stamer I have had really good results in Petersburg. Like Linda says you have to know your way around. If you want to connect PM me. I'm also an investor friendly agent in the area.