Killing it by turning crack dens into safe housing

133 Replies

I’d like to share my strategies here to help others make money and turn the worst war zone, vacant areas into safe spots for families to live.

I’m by no means the only one doing it. It’s just hard to find people talking about it. 

I think if we talked about it more more people would take the risk and the worst crime areas could turn very quickly into homes.

Some of them aren’t going to be pretty. 

Some are pretty simple.

Welcome all to advise and share here.....

Especially those who have successfully taken stuff from war zone to secure housing.

So I’ll start it out.

Buy the worst house in whatever area your going to purchase. It might be useful to ask the cops what house they goto most often in the city.

Try to buy at least half a block. Getting a corner with 100’ in each direction is helpful.


See a bodega? Get that too.   Don’t let a single commercial or residential property within 500’ get sold to someone other then you or some one you can trust that will assist you.

@Jon Schoeller

Vacant buildings. Lots of em. That’s the way to start. Need drug dealers and hookers too.

Identify an area that is hopefully close to a nice area....say within a mile or two.

I like at least 50% vacant or distressed real estate. 80%is even better. But....you have to own all the vacants or at least be able to control them.

Property needs to be cheap enough that you can accurate a decent percentage of the area....and you especially want to control the worst buildings.

Bc it’s funny what happens in bad areas. You fix up all the bad ones you own...and the junkies will move to the one house on the block....sometimes the formerly nicest house and set up shop there.

Okay I have an area like that near me. So now lets say I own most of if not all of the block. Now what? 

@Jon Schoeller your sure it’s the worst area? At least 50% vacant good neighborhood close by?

K.

so what are the prices for SFR and MFR. How much is Rents. Taxes etc.

Drug dealers shooting each other? Got Hookers? Is there a big percentage of homeless crazies and drug addicts.

What do the locals say about the area.

Most important of all. How long has it been this way. I Personally think I can turn any block around. But from experience I can tell you it’s a lot easier if you find an area that’s been long burned out. Low population density in the area is good. Vacant lots, parks, parking lots, cemetery’s are all good places.

When I look for a bad area I don’t what to be on one of the worst blocks among 20 bad blocks. With rows upon rows of occupied houses.

I want the neighborhood to look like Detroit(no offense Detroit I love you)

So let’s hear about it. Are you willing to share info?

If the area is really that bad your not going to have to fight with buyers. If you want give me an adress I’ll look it up on some of the stuff I use.

@Jon Schoeller is it that area near Kanazawa? Crime is high enough. Don’t see many vacants tho.

You need something like this   

If you scroll down there a few rows of vacants   Say 20 units.  That’s  when the strategy works well   

https://www.flickr.com/photos/...

Where are you thinking.

@Account Closed ,  I like your style and confidence.  Following your posts will be enjoyable.  Your comment, "Need drug dealers and hookers too."  had me laughing -but I get what you mean.   

Maybe give your readers a sense of what this project will cost as far as down payment and total purchase and rehab costs.  Rehabbing a city block won't be cheap -even if you get the real estate for next to nothing.



So you're trying to be altruistic about a particular map coordinates be deleting the problem people from the area.

This will not solve the problem, all it will do is move the problem to another map coordinates.



This is a high risk strategy that requires boots on the ground, lots of capital to back you and is not for everyone, particularly someone just getting started. It can also be dangerous, personally, I’m not risking my life just to make a buck in a cesspool, I can make money in better areas without the risk or headaches that come with this strategy. That said, I am certainly not discouraging you, just pointing out to others the risks involved. 

@Will Barnard

Your first sentence is 100% correct. Yes what I do is high risk.

This is not a “hey I have a new investment strategy that’s fine and easy and anyone can do it post”

I do not suggest this for someone that is just getting started in RE. There are plenty of other folks this will not appeal to.

Although for the right type of person this can be your first stab at RE  

People that have specialized skills.  

But if you think your juts an average type, looking for minimal returns keep moving   


This is  not for everyone....although I personally think anyone can do it   

But not everyone will.

Unless they have stones.

The words i write here are not going to give some spineless loser the intestinal fortitude to walk down the most dangerous blocks in the world buy houses and turn crack dens into Disney land for hipsters.

if you have the stomach for what I do I will devote myslef to help you turn war zones into safe zones.

And if your tougher then I am have and have experience in this arena pls share your info.

I will return the favor in some way.

If not move one check out Zillow mls auction.com....cruise loop net. There are plenty of 5 caps about there......

This stuff I want to share is not average guy stuff.

You said.....

This is a high risk strategy that requires boots on the ground, lots of capital to back you and is not for everyone, particularly someone just getting started. It can also be dangerous, personally, I’m not risking my life just to make a buck in a cesspool, I can make money in better areas without the risk or headaches that come with this strategy. That said, I am certainly not discouraging you, just pointing out to others the risks involved. 

Originally posted by @John Hickey:

@Brian Brusich pls explain.

Huh? Flint was great until it wasn't. The middle class was created in Flint. Now it's decayed remnants of times passed. Though downtown seems to be swinging the right direction.

@Scott Mac I don’t think I’m very altruist.

But yes I will move problems from where I own to where others own. 

And guess what.  I not only try to figure out where to put the problems I also plan to where to put them.  And then after a bit I go there and start making offers.  

Just yesterday I went and made an offer to an owner.  He said things have gotten very bad aroind here recently. I can’t take it anymore.  

When I was outside I knew most of the junkies.  I had told them they could not  be near my corner anymore recently.  They refused......when they wouldn’t leave I had used some unorthodox methods to encourage them to leave. They left  

His offer to me was much lower than market.  Once I close I will move them again.  

@Brian Brusich if there is an upswing you should probably look someplace Else.  

Someone is in control of that upswing. 


 If your not in control of the upswing what you buy is a gamble.  

K folks.  Your looking for proof?

508 Lafayette ave Brooklyn NY 11205

Purchase 6/2007 714k sold 7/2017 1.7m

54 benkard Newburgh by 12550

Purchase 5/2017 47k sold 11/18 159k

163 broadway Newburgh ny 

Purchase 9/2017 560k sold 9/2019 895k

Those aren’t flips.  I didnt gut renovate and sell them.  

I buy crack dens and clean them up and sell them.

I’m not the only one doing it. If you have have what it takes it’s relatively easy.  

@Account Closed the figures look promising, but too incomplete to analyze. Do you ever use the BP Rental Property Calculator, BRRRR Calculator, or Wholesaling Calculator? Anyone of those tools, if fully filled out, would provide the info needed to understand the potential of your projects.

Originally posted by @John Hickey:

K folks.  Your looking for proof?

508 Lafayette ave Brooklyn NY 11205

Purchase 6/2007 714k sold 7/2017 1.7m

54 benkard Newburgh by 12550

Purchase 5/2017 47k sold 11/18 159k

163 broadway Newburgh ny 

Purchase 9/2017 560k sold 9/2019 895k

Those aren’t flips.  I didnt gut renovate and sell them.  

I buy crack dens and clean them up and sell them.

I’m not the only one doing it. If you have have what it takes it’s relatively easy.  ?

so you don't do gut reno, you "clean them up"

what does your "clean them up" entail?

aloha

steve

 

@Davido Davido no. When I started out on BP I used to use the BP deal calcaulator. It’s a good tool.

In analyzing deals the the numbers aren’t usually in line with reality so I didn’t see much sense in continuing it.

I’m selling a bunch right now.

I’m doing my taxes in the spring so I’ll probably put a P and L together at some point. I’ll PDF it and post if but that will be a while. I sold one last year but it wasn’t a good example the neighborhood wasn’t that bad.

@Steve K. In some cases I am gutting an actually I take that back on 508 Lafayette. That was a gut....just did it in stages.

But.....508 was supposedly worth as much gutted as it was a shell when I sold it. So that’s what was in my mind when I was posting that.

The idea that properties will be worth more to a buyer needing a ton of work in some cases no CO....then if it was stabilized.

The agent on 508 said there was a lot of buyers that didn’t like the way the Reno was done so they didn’t bid...and she said if they had bid they wouldn’t care if it was a shell..

The point I was making is that the returns are awesome and the properties while a pain in the a$$ to manage don’t need too much work to be worth money.

So you can invest less....shells in bad areas when cheap are sometimes 3-5k. If you fix the area enough that ppl want to move it it now the shells will trade at a premium.

Example.

156 south st Newburgh. This one I am gutting.

I bought it last year for 45k. We put in about 40 or 50k I think so far. It’s not finished.

The agents locally are trying to convince me to sell it now. They say I’ll get more for it as a shell 250k! Right now......just like 508 then if I finish and sell it get it appraised.

It’s worth 300k tops finished. So what makes a shell worth more than. A stabilized property? Expectation of future appreciation.

A lot of ppl don’t like buying for expectation of future appreciation. I’m with them on that.

I only buy when I know I can make the block worth more soon. That’s not expecting. Making future appreciation.

I’m bidding on another one close by right now. Shell. Needs gutting I’m bidding 225. Crazy to buy a house for 225 while I am selling one for 250k? No I bought the other for 45k and the ppl buying it will be ppl that i decide. Owner occupiers or landlords I think that are good ppl. I don’t sell to slumlords. Well at least not if I’m still keeping property on the block.

That idea falls under do not let any property within 500’ get out of your control.

@Michael P.  Well then you are my end user client.  


Place for everyone in this world. Wait a few years till it’s 20x the price. I need ppl like that to take me out of my loans. Nothing wrong with that. I cultivate a list of them.

@Dennis M. place in this world for everyone.  

The druggies will wear you out tho as I am sure you know. 

Been around drug neighborhoods my whole life.  Probably just like you.  This doesn’t work in half ok neighborhoods.  Only burnt out war zone areas.

Keep the strategy in mind.  If you see the area tip towards high vacancy let me know.  

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