Any one has rental in D class neighborhood.
Member since 2021 · 42 posts · 33 votes
Any one has rental in D class neighborhood.
Most Popular Reply
Leroy K. WilliamsPro Member
Property Manager · Southfield Mi · Member since 2018 · 182 posts · 171 votesQuote from @Elvin William:
Quote from @Linda S.:
I'm going to guess you haven't been in the house recently and seen how your tenants are taking care of it, because that's where most experienced landlords are coming from. No one ever complains of the rent coming in, but instead of the treatment/damages of the house. Sounds like you haven't seen the turnover yet, but when that happens, you will understand more.
Here is the thing, your rental property will likely perform not based solely on whether its a Class A, B, C, or D but more on whether your tenant is a Class A-D person. There are low-income people on Section 8 who are high class people however they tend to look outside of the Class D properties. Why? It's not because they are too classy to live in the interior neighborhoods or because it's too dangerous. Those aren't the primary factors. The biggest issue for them is that quite often Class D neighborhoods attract Class D investors, Low life investors who think that they can buy for pennies on the dollar, invest peanuts into the rehab and then collect free income from the government for years to come.
If more investors actually improved their property to the point that it becomes the best home on the block in the Class D community, they would attract a great tenant and will help uplift a community starving for reinvestment in the process.
43 Replies
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes2y
Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
It makes money, but it ain't easy. Section 8 tenants are by their nature low quality people who are very irresponsible. So the money coming in is great, but you'll be working very hard for every penny.
- Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes2y
I'm going to guess you haven't been in the house recently and seen how your tenants are taking care of it, because that's where most experienced landlords are coming from. No one ever complains of the rent coming in, but instead of the treatment/damages of the house. Sounds like you haven't seen the turnover yet, but when that happens, you will understand more.
- Member since 2021 · 42 posts · 33 votes2yI'm not going to lie. Never been to that state. Lol. I have four property in the same city from D class to class b. I'm new to rental property. I have a great property manager who takes great care of my property. When we bought that D class property, there was someone in there already. We kick that person out and got a bill for $30,000. We bought that place for $37,500. The rent or section 8 around $975 a month and they pay all the utilities. I mean it's good to learn the hard way and learn from it.
Quote from @Linda S.:
I'm going to guess you haven't been in the house recently and seen how your tenants are taking care of it, because that's where most experienced landlords are coming from. No one ever complains of the rent coming in, but instead of the treatment/damages of the house. Sounds like you haven't seen the turnover yet, but when that happens, you will understand more.
- 2yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Elvin William we don't recommend investing in Class D in Detroit - too many headaches and there are lots of Class C options.
The only investors we know that make Class D work or those that DIY manage and go by their properties several times each week.
Logical Property Management4.9453 Reviews - 2yLeroy K. WilliamsPro MemberProperty Manager · Southfield Mi · Member since 2018 · 182 posts · 171 votes
Quote from @Elvin William:
I'm not going to lie. Never been to that state. Lol. I have four property in the same city from D class to class b. I'm new to rental property. I have a great property manager who takes great care of my property. When we bought that D class property, there was someone in there already. We kick that person out and got a bill for $30,000. We bought that place for $37,500. The rent or section 8 around $975 a month and they pay all the utilities. I mean it's good to learn the hard way and learn from it.Quote from @Linda S.:
I'm going to guess you haven't been in the house recently and seen how your tenants are taking care of it, because that's where most experienced landlords are coming from. No one ever complains of the rent coming in, but instead of the treatment/damages of the house. Sounds like you haven't seen the turnover yet, but when that happens, you will understand more.
Here is the thing, your rental property will likely perform not based solely on whether its a Class A, B, C, or D but more on whether your tenant is a Class A-D person. There are low-income people on Section 8 who are high class people however they tend to look outside of the Class D properties. Why? It's not because they are too classy to live in the interior neighborhoods or because it's too dangerous. Those aren't the primary factors. The biggest issue for them is that quite often Class D neighborhoods attract Class D investors, Low life investors who think that they can buy for pennies on the dollar, invest peanuts into the rehab and then collect free income from the government for years to come.
If more investors actually improved their property to the point that it becomes the best home on the block in the Class D community, they would attract a great tenant and will help uplift a community starving for reinvestment in the process.
- Member since 2021 · 42 posts · 33 votes2yThanks for the update. Wife and I spend over $30,000 to fix up and upgrade the house. After it's all done, it will be a brand new house. I have a great property manager who takes care of property. Thanks for your detail feedback. Very much appreciated.
Quote from @Leroy K. Williams:
Quote from @Elvin William:
I'm not going to lie. Never been to that state. Lol. I have four property in the same city from D class to class b. I'm new to rental property. I have a great property manager who takes great care of my property. When we bought that D class property, there was someone in there already. We kick that person out and got a bill for $30,000. We bought that place for $37,500. The rent or section 8 around $975 a month and they pay all the utilities. I mean it's good to learn the hard way and learn from it.Quote from @Linda S.:
I'm going to guess you haven't been in the house recently and seen how your tenants are taking care of it, because that's where most experienced landlords are coming from. No one ever complains of the rent coming in, but instead of the treatment/damages of the house. Sounds like you haven't seen the turnover yet, but when that happens, you will understand more.
Here is the thing, your rental property will likely perform not based solely on whether its a Class A, B, C, or D but more on whether your tenant is a Class A-D person. There are low-income people on Section 8 who are high class people however they tend to look outside of the Class D properties. Why? It's not because they are too classy to live in the interior neighborhoods or because it's too dangerous. Those aren't the primary factors. The biggest issue for them is that quite often Class D neighborhoods attract Class D investors, Low life investors who think that they can buy for pennies on the dollar, invest peanuts into the rehab and then collect free income from the government for years to come.
If more investors actually improved their property to the point that it becomes the best home on the block in the Class D community, they would attract a great tenant and will help uplift a community starving for reinvestment in the process.
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2yYes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?
Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
- Member since 2021 · 42 posts · 33 votes2yToledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.
Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
I hear Toledo is great for cash, flow, not sure about appreciation. I have avg about 20% net on rentals, and triple or more on appreciation over the last 10 years in Cleveland. For an expert opinion on Toledo speak with @Engelo Rumora I hear he is to Toledo what I am to Cleveland
Good luck
- 2yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Quote from @Bob S.:
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
I hear Toledo is great for cash, flow, not sure about appreciation. I have avg about 20% net on rentals, and triple or more on appreciation over the last 10 years in Cleveland. For an expert opinion on Toledo speak with @Engelo Rumora I hear he is to Toledo what I am to Cleveland
Good luck
Thanks Bob,
One day when I grow up I want to be like you haha - 2yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
Hi Elvin,
Are you based in Toledo?
43608 is rough and out of hundreds of deals we have done over the last 10 years, never touched 43608.
Only a few streets are decent but even then, I wouldn't buy in the area.
It's the "bang on doors with a shot gun and bullet proof vest" type property management style hehe
Each to their own tho.
43609 is decent but can also be a hit and a miss so will depend on the exact pocket.
Wishing you much success - 2yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Quote from @Elvin William:
I'm not going to lie. Never been to that state. Lol. I have four property in the same city from D class to class b. I'm new to rental property. I have a great property manager who takes great care of my property. When we bought that D class property, there was someone in there already. We kick that person out and got a bill for $30,000. We bought that place for $37,500. The rent or section 8 around $975 a month and they pay all the utilities. I mean it's good to learn the hard way and learn from it.Quote from @Linda S.:
I'm going to guess you haven't been in the house recently and seen how your tenants are taking care of it, because that's where most experienced landlords are coming from. No one ever complains of the rent coming in, but instead of the treatment/damages of the house. Sounds like you haven't seen the turnover yet, but when that happens, you will understand more.
G'Day Elvin,
I could write so much here but will just let it be.
I suggest staying very hands on and super super diligent.
Keep us posted on the performance of your portfolio.
Wishing you the best - Member since 2021 · 42 posts · 33 votes2yThanks for the update on the area. I never been to Toledo. I got one sfh is 43608, second one is 43609 and two others in 43612. My goal, I want to rent them to section 8. I'm going to buy more in the future but in the 43612 and 43613 area.
Quote from @Engelo Rumora:
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
Hi Elvin,
Are you based in Toledo?
43608 is rough and out of hundreds of deals we have done over the last 10 years, never touched 43608.
Only a few streets are decent but even then, I wouldn't buy in the area.
It's the "bang on doors with a shot gun and bullet proof vest" type property management style hehe
Each to their own tho.
43609 is decent but can also be a hit and a miss so will depend on the exact pocket.
Wishing you much success - 2yEngelo RumoraBusiness MemberInvestor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
Quote from @Elvin William:
Thanks for the update on the area. I never been to Toledo. I got one sfh is 43608, second one is 43609 and two others in 43612. My goal, I want to rent them to section 8. I'm going to buy more in the future but in the 43612 and 43613 area.Quote from @Engelo Rumora:
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
Hi Elvin,
Are you based in Toledo?
43608 is rough and out of hundreds of deals we have done over the last 10 years, never touched 43608.
Only a few streets are decent but even then, I wouldn't buy in the area.
It's the "bang on doors with a shot gun and bullet proof vest" type property management style hehe
Each to their own tho.
43609 is decent but can also be a hit and a miss so will depend on the exact pocket.
Wishing you much success
43612 and 43613 is bread and butter.
It's hard to go wrong in those 2 areas.
Well done and much success - Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Engelo Rumora:
Quote from @Bob S.:
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
I hear Toledo is great for cash, flow, not sure about appreciation. I have avg about 20% net on rentals, and triple or more on appreciation over the last 10 years in Cleveland. For an expert opinion on Toledo speak with @Engelo Rumora I hear he is to Toledo what I am to Cleveland
Good luck
Thanks Bob,
One day when I grow up I want to be like you hahaWe will connect next week, I have unlimited buying and need more props. Cleveland is not easy to get them anymore.
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
Ok so all in 60k, ARV? Rent I assume ( 3 brs ) 1300- 1500 ?)
- Member since 2021 · 42 posts · 33 votes2y
Quote from @Bob S.:
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
Ok so all in 60k, ARV? Rent I assume ( 3 brs ) 1300- 1500 ?)
I wish. In that area, it's around $900 to $950 a month. And after fixing, I'm all in at $67,000. This is my first ever property I bought. I live and learn experience.
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Elvin William:
Quote from @Bob S.:
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
Ok so all in 60k, ARV? Rent I assume ( 3 brs ) 1300- 1500 ?)
I wish. In that area, it's around $900 to $950 a month. And after fixing, I'm all in at $67,000. This is my first ever property I bought. I live and learn experience.
All in fully renovated for 70k with 925 is not bad. I know the taxes are low. We get 1400- 1600 for 3 brs all in 70- 90k :) Duplex all in 90- 110k, rents from 1800- 2k :)
All the best
Hey congrats man, thats a good deal for your 1st, Keep on going
- Member since 2021 · 42 posts · 33 votes2yI do appreciate. I got all four property for $30,000 to $37,500. Fixed up looking at $45,000 to $67,000. Rents for each $1112, $700, $1050. All my property are 3 bed 1 bath and all less than 1000sq house.
Quote from @Bob S.:
Quote from @Elvin William:
Quote from @Bob S.:
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
Ok so all in 60k, ARV? Rent I assume ( 3 brs ) 1300- 1500 ?)
I wish. In that area, it's around $900 to $950 a month. And after fixing, I'm all in at $67,000. This is my first ever property I bought. I live and learn experience.
All in fully renovated for 70k with 925 is not bad. I know the taxes are low. We get 1400- 1600 for 3 brs all in 70- 90k :) Duplex all in 90- 110k, rents from 1800- 2k :)
All the best
Hey congrats man, thats a good deal for your 1st, Keep on going
- Member since 2021 · 42 posts · 33 votes2yWhere do you buy your property?
Quote from @Bob S.:
Quote from @Elvin William:
Quote from @Bob S.:
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
Ok so all in 60k, ARV? Rent I assume ( 3 brs ) 1300- 1500 ?)
I wish. In that area, it's around $900 to $950 a month. And after fixing, I'm all in at $67,000. This is my first ever property I bought. I live and learn experience.
All in fully renovated for 70k with 925 is not bad. I know the taxes are low. We get 1400- 1600 for 3 brs all in 70- 90k :) Duplex all in 90- 110k, rents from 1800- 2k :)
All the best
Hey congrats man, thats a good deal for your 1st, Keep on going
- Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes2y
Quote from @James Wise:
Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
It makes money, but it ain't easy. Section 8 tenants are by their nature low quality people who are very irresponsible. So the money coming in is great, but you'll be working very hard for every penny.
Not all of them are low quality. We have some that are decent people. Nonetheless, watched your serving of the eviction notice in the video below. You don't carry a taser or gun? We carry both when serving evictions. You could have gotten hurt. Stay safe and get a taser and gun if you want to serve. I know you know this, but it can get scary. There's more than one time I've been in the same situation in my younger years. Tasers are your friends; gun as a backup in case they are carrying too.
- Alexandria, VA · Member since 2013 · 54 posts · 19 votes2y
I rented to section 8 tenants for 10 years. It will test you. It helped me realize the hard way that location really does matter. My biggest challenge was finding an effective property manager as I was not able to manage it myself. I have posted over the years on this topic. Spoiler alert: in 10 years I never found one. In my experience, D class neighborhoods attract D class property managers. A class property managers will opt for better neighborhoods. The caliber of managers willing to go to those neighborhoods was low. Again just my experience. In retrospect, it’s best to be hands on if you can and manage these types of properties yourself. It’s better to have a presence at the property and I have found the tenants to be a lot more high maintenance. They are also hard on your properties and require extensive repairs. I’m happy to share more of my experience if you’d like to DM me. One positive to note, during Covid when tenants stopped paying their rent ( and the government supported them in doing so) it was great to have section 8/ at least I got the minimum amount to pay the mortgage!
- Member since 2021 · 42 posts · 33 votes2yThat was a great information. The property management I have is so great to me and my property. I have 2 property is D class and 2 in C+ or B- area. And the property management does the same job. For them, they treat people right. I have one section 8 that has issues, like not putting trash can back where they should be at. Toilet leaks, some stuff like that. I like issues like that, that I can fix and don't worry about it in the future. If you have section 8 not telling you the issue, than in long run, you going to have a bigger issue. All my property are under $40,000 and rents are like $950 to $1112 a month. If I can cash flow $500 to $600 each, I should be fine.
Quote from @Lisa Verna Staggers:
I rented to section 8 tenants for 10 years. It will test you. It helped me realize the hard way that location really does matter. My biggest challenge was finding an effective property manager as I was not able to manage it myself. I have posted over the years on this topic. Spoiler alert: in 10 years I never found one. In my experience, D class neighborhoods attract D class property managers. A class property managers will opt for better neighborhoods. The caliber of managers willing to go to those neighborhoods was low. Again just my experience. In retrospect, it’s best to be hands on if you can and manage these types of properties yourself. It’s better to have a presence at the property and I have found the tenants to be a lot more high maintenance. They are also hard on your properties and require extensive repairs. I’m happy to share more of my experience if you’d like to DM me. One positive to note, during Covid when tenants stopped paying their rent ( and the government supported them in doing so) it was great to have section 8/ at least I got the minimum amount to pay the mortgage!
- Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Elvin William:
Where do you buy your property?Quote from @Bob S.:
Quote from @Elvin William:
Quote from @Bob S.:
Quote from @Elvin William:
Toledo area. 43608 and 43609 area. Got two houses for $30,000 each. So putting another $30,000 to rehab.Quote from @Bob S.:
Yes, for about 10 years, Pricing has doubled, tripled or much more in those areas. Buying as much as we can in certain D areas. 35k for a fully renovated prop, you must be in an F area. Even in the worst areas of my market you are not getting a fully renovated prop for under 50k- 60k. What market you in ?Quote from @Elvin William:
Hello, I want to know if anyone is investing in D class Midwest neighborhood. How are you guys doing with D class. I'm more into section 8. Is anyone having positive experience? Thanks. I have 2 sfh in D class. $37,500 and $30,000 another one. Rent is $950 and other is $900. They pay all the utilities. My monthly mortgage is $300 each with 20% down.
Ok so all in 60k, ARV? Rent I assume ( 3 brs ) 1300- 1500 ?)
I wish. In that area, it's around $900 to $950 a month. And after fixing, I'm all in at $67,000. This is my first ever property I bought. I live and learn experience.
All in fully renovated for 70k with 925 is not bad. I know the taxes are low. We get 1400- 1600 for 3 brs all in 70- 90k :) Duplex all in 90- 110k, rents from 1800- 2k :)
All the best
Hey congrats man, thats a good deal for your 1st, Keep on going
Cleveland markets
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes2y
If you start with class D the most likely outcome is that you will learn a lot in a short time and then either trade into better neighborhoods or just get out of REI all together. Very few people make it long-term.
Tenant issues aside, renting in class D neighborhoods is financially not a very good concept. Over time capex exceeds cash flow. I have seen it many times. People don't realize the mounting capex liability, it is almost invisible until it's too late. Milwaukee D class is fools gold; most people are not cut out for it. You can't find a good PM and if you self-manage (which is probably the only way to make it work) it will burn you out.I had an old investor on our of our RPA lunch&learns who told us in the Q&A that he has been renting and self-managing a sizeable section 8 portfolio for over 30 years. The topic was "How to make a million with REI in 7-10 years" and he said he is nowhere near that. Working his but off for over 30 years, doing most of the work himself, he had to refi properties along the way to have money for roofs, plumbing, basement issues and driveways. He wants to retire, but he can't really sell the portfolio, does not have that much equity and he is holding it together with both arms, so he can't step back.
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