From Hood to Home, Investing in sub 30k properties

From Hood to Home, Investing in sub 30k properties

Wholesaler · Zachary, LA · Member since 2014 · 19 posts · 31 votes

Investing in one of the roughest areas in Baton Rouge, LA has been a wild ride so far. I wanted to do a brain dump of what has happened so far and see what everyone else has experienced overall. My wife and I started investing in the 70805 (high crime, poverty, drugs, etc.) area code a few years ago. We purchase houses that look like they are ready to be torn down. Almost all of our purchases are full renovations (new plumbing, electrical, roof, floors, fixtures, etc). We try to stick to an ARV of 40x the rent. So on a 3/1 SFH that will rent for $600 we should be all in for $24k. We don't provide any appliances or cover any electricity, water or garbage. When we are finished remodeling our homes they are the nicest that the neighborhood has ever seen. Our tenants are thoroughly screened and vetted. In they end we usually end up renting to older couples that become our new grandparents. This area has some of the best people in the world. They are proud, respectful and kind. They take pride in their nice house and we rarely have a problem on a personal communication level with anyone. There are a few tenants that are late every now and then. But for the most part, all is well. We are investing in a targeted area of 600 available houses. I would like to own 100 of them before we move somewhere else. What are you guys experiences in high crime, low-income areas?

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Lender · Cleveland, OH · Member since 2016 · 33 posts · 23 votes
9y

i love this post the sub 30k area is very profitable if you can take your feelings out of the business. lets be real there are problems that low income people have that middle and high income don't.  The up side that is almost always overlooked is that with the correct screening when you do get a tenant they almost never move out. i screen for job history at least 2 years on the same job , 2-3 months of bank account  statements with no over drafts. letter from boss and references ..... i look for income and job history low income doesn't mean dangerous. and most important it doesn't mean late paying or non payment. i have a few duplexes with tenants paying 550 each unit and we bought them and did renovation all in for sub 30k. keep up the great work

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  • Real Estate Investor · Arlington, VA · Member since 2012 · 302 posts · 277 votes
    9y

    Hi!

    How nice! You went into high crime city, huh? Excellent, and congratulations to you and your wife for making that happen. It would be great for you to tell this story in the sub30k mastermind group (you can check my profile on getting access), to help build the story around investing in these areas. Also, you have people who have invested in safe, and high crime areas, so you can bounce ideas off of them there.

    For the most part personally, we made sure we secured the building in a way that really deterred criminals, and made sure we do a block by block analysis - learn how to read which blocks were good, and which ones we should stay away from. If you choose the wrong block, you might as well burn your money up.

    How is the city government? Corrupt, fair? targeting homeowners and landlords fairly or unfairly? I think those questions mean the most.

  • Investor · Lafayette/Baton Rouge, LA · Member since 2013 · 1k+ posts · 915 votes
    9y

    Exellent post @Rip Rittell!  A lot of new and aspiring investors can learn from the way you clearly defined your niche and your long term goals!  Well done!

  • Real Estate Professional · Baton Rouge, LA · Member since 2016 · 109 posts · 30 votes
    9y

    excellent post, excellent responsive feedback, this is a market that you really have to have dedication and deep commitment, thank you @Rip Rittell, @Lisa Phillips for keeping your communities strong, something that we may need to wrap our brains around & we love the inspiration that drives you guys to carve out a niche that is underappreciated in societies eye! keep posting but most of all keep sharing

  • Real Estate Investor · Arlington, VA · Member since 2012 · 302 posts · 277 votes
    9y

    Yes! We are now starting to do GREAT things in these (our) communities and its great we can have an entire subclass who can go into them and invest with respect and strategy :-) 

  • Lender · Cleveland, OH · Member since 2016 · 33 posts · 23 votes
    9y

    i love this post the sub 30k area is very profitable if you can take your feelings out of the business. lets be real there are problems that low income people have that middle and high income don't.  The up side that is almost always overlooked is that with the correct screening when you do get a tenant they almost never move out. i screen for job history at least 2 years on the same job , 2-3 months of bank account  statements with no over drafts. letter from boss and references ..... i look for income and job history low income doesn't mean dangerous. and most important it doesn't mean late paying or non payment. i have a few duplexes with tenants paying 550 each unit and we bought them and did renovation all in for sub 30k. keep up the great work

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