Wholesaler · Brooklyn, NY · Member since 2016 · 17 posts · 4 votes
In deciding whether to buy a big multifamily property or not, does the fact that there has been a couple of shootings over a couple of years in the complex play a big role? What about reports of sewage flooding apartments some of the units? Do these issues gathered from the grapevine merely affect the price during the negotiation stage? Thank you.
Real Estate Agent · Plano, TX · Member since 2015 · 734 posts · 511 votes
9y
@Thomas Fawole I would re-evaluate your classification of the building/area. Class C is usually blue collar, hard working people. People that work don't have time to shoot each other. Sounds more like. Class D to me.
Class D means higher risk and thus commands lower prices in the market.
As for the plumbing issues, EVREY class C/D building has plumbing issues. What we do is budget a big sum of money for capex when we purchase the property to cone in and fo the work to "reset" the plumbing day one.
Make sure to higher licensed plumbers to come in with cameras and inspect ALL the lines under the buildings during your due dilligence period.
If your tenants are being killed it will have a short term negative impact until you find a new tenant. If the entire neighbourhood is a D class then likely hood is potential tenants are accustom to the environment and probably accept it as the norm.
IN C/D class neighbourhoods the prices are what they are based on the community as opposed to individual instances of violence in a specific building.
Specialist · Plainville, CT · Member since 2015 · 478 posts · 389 votes
9y
@Thomas Fawole- Another challenge you will have too (probably your biggest one) is getting investors to partner-up with you and buy something that is perceived to be in a war zone. I'm assuming you are looking to form a syndication for your deals correct?
Palo Alto, CA · Member since 2017 · 226 posts · 95 votes
9y
I love the reply "if your tenants are killed it will have a short term impact" by @Thomas S. Probably true as long as something hasn't changed in the building such as a crack house starting business.
Real Estate Agent · Plano, TX · Member since 2015 · 734 posts · 511 votes
9y
@Thomas Fawole I would re-evaluate your classification of the building/area. Class C is usually blue collar, hard working people. People that work don't have time to shoot each other. Sounds more like. Class D to me.
Class D means higher risk and thus commands lower prices in the market.
As for the plumbing issues, EVREY class C/D building has plumbing issues. What we do is budget a big sum of money for capex when we purchase the property to cone in and fo the work to "reset" the plumbing day one.
Make sure to higher licensed plumbers to come in with cameras and inspect ALL the lines under the buildings during your due dilligence period.