Buying near new casino

[Sam Hendricksen]

Good morning fellow BPers,

I'm looking at buying my second property, this time a multifamily with my VA loan. Most of the multifamily in my area is in Norfolk and Portsmouth VA.

There’s a new casino opening in portsmouth, Rivers Casino. And im looking at a quadraplex a 5 min drive from the casino. It’s on a quieter street, low income area. I’ve heard that this neighborhood doesn’t really have any problems from a social worker but outside areas aren’t good. 

3/4 units are currently rented at $900 each, renters pay utilities. I’m wondering if the new casino will raise the values in a few years and if a low income but not crime heavy area would be worth it?

https://www.riverscasinoportsm...

[Alan Robert Litz]

Hey Sam! do you plan to live in that property? It has to be your primary residence to be able to use your VA loan. Also if you have a single-family house already sometimes loan underwriters don't approve you moving from a single-family to a multifamily. It all depends on the lender really. We have a single-family property that will not be far from the casino that we are looking to wholesale if you might be interested in that.

[Jeff Schemmel]

Having watched many prior co-workers get paid, cash their check at the casino, and promptly deposit it all into a slot machine I can tell you with pretty good certainty that casinos don't have a positive effect on disposable income and good use of the existing income in the area surrounding :)

Are there solid local employers OTHER than the casino in a 15-minute drive?  Is there a hospital or a college around?  If it were me, I'd be looking for something in that location to offset the negative impact of the casino.  that OR consider buying a property you could short-term rent to people who literally just want to visit the casino if it's a large/decent one.  There will always be people who want to rent by one but I wouldn't count on one raising property values - I would in-fact assume the opposite.

[Sam Hendricksen]

Thank you both for the advice!

@Alan Robert Litz Yep I’m planning to live in the property, I’ve already been pre approved and talked with 2 lenders. I’d rather not do a single family again until my third house - I’m getting married in January and would like to be able to rent it without house hacking :).
@Jeff Schemmel  That’s a really good point. There’s a smaller hospital nearby and a large one the city up but I don’t think the nearby ones cover the point you’re making. It doesn’t have good parking either so it would be difficult to make it a short term rental.

I think I’ll pass on it unless something changes.

[Jacob Sloop]

@Sam Hendricksen

Multifamily is super competitive in this area and you have a huge advantage over your "competition" with the fact that you are owner occupying as most deals nowadays hardly cash flow.  House hacking is going to be a great starting point to building your wealth that you can leverage in the future.  Just make sure you guys are comfortable with the area before pulling the trigger. Living with your tenants can be very challenging speaking from experience. 

I would suggest focusing on Norfolk over Portsmouth,  its a better market with more appreciation.  Feel free to message me and we can talk offline