How do you determine if a building is a certain class? Is it purely subjective or are there some kind of guidelines?
Many people wonder about this, as did I a short while back.
Here is a link to a thread that someone answered concisely:
I hope that helps!
It's a long thread so I'm pasting the most important component here:
"There are no strict definitions of these terms. They're just rough grade people use to give an idea of what a property is like.
A: Newly built properties in the nicest areas.
B: Slightly older property, but still nice. Might be not quite as nice of an area.
C: Older properties. Likely really could use some work. Not the best areas. For investors, these are really the bread and butter for rentals.
D: Run down properties in bad areas.
The area and the property can be described separately. Its possible to have a run down property in a great area. Harder to have a great property in a bad area, though."
Credit to @jon holdman (He's a bigger pockets moderator so this definition is probably pretty solid)
We look at properties and areas separately. For example, you could be looking at a B property in an A location or vise versa.
Many value add investors look for B & C class properties in A & B locations.
Hope that makes sense.
I think what @sean said is true. I look for ABC locations then overlap it with the AS IS AB or C property (which can be lower or higher) than end up with a finished product A B or C.
So of course you want to look for a B or lower in a A location not a B or higher in a C location. It that clear as mud!/?.
I flip in the C+ locations and higher and wholesale and rent in the C+ locations and lower. But that is just me. Good Luck
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