Killing it by turning crack dens into safe housing

Innovative Strategies
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Killing it by turning crack dens into safe housing

John Hickey
Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes

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.

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Michael Ealy
Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes
7y
Originally posted by @John Hickey:

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.

 Good strategy and kudos to you for having the guts to do it. Not many real estate investors, and specially newbies can do what you do.

Having said that, buying in the worst neighborhood by buying the whole block can be very profitable. One deal I did was in Avondale area of Cincinnati. If you do your research, Avondale has one of the highest crime rate in Cincinnati. I got 30 units - townhomes for only $450,000 - and only 3 were occupied. They were paying $300/month. You can research the address - 3561 Eden Ave, Cincinnati.

Got everyone out and renovated the units (it's still going on). When I did my estimate, I projected the rents can be increased to $850/month. But I made a mistake.

It was way lower than my projections. My leasing agent was able to lease it for $1,250/month. And there was a waiting list. My partner and I will make $2 MILLION by the time we sell it or if we decide NOT to sell and just refi, we'll get $1M cash on top of our initial capital and keep it for cashflow.

Here are the pictures: (I will dig up the before and post a before and after in a different post)

Here's a video: 

If you ask the folks here on BP who lives in Cincinnati if they will buy in Avondale, 99% will say "NO way!" That's why 99% will never make $2M on one deal. Again, not a strategy for a newbie BUT, doing this improves neighborhoods and the real estate developers and investors who are willing to do this, can get rewarded handsomely.

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  • William McCartney lll
    Member since 2017 · 4 posts · 2 votes
    7y

    John how do you feel about corner of  William st and Renwick Newburgh ny 

    0Reply
  • John Hickey
    OP
    Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    7y

    @William McCartney lll   Used to be a lot worse.  

    Give us some tips on what you did pls   

    0Reply
  • William McCartney lll
    Member since 2017 · 4 posts · 2 votes
    7y

    What do you think 

    William st for small business 

    Coffee shops ,retail stores 

    Restaurant????????????????????

    0Reply
  • John Hickey
    OP
    Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    7y

    @William McCartney lll yeah.  That’s going to happen.  

    Artists in the commercial will make it go that route quicker.  

    0Reply
  • William McCartney lll
    Member since 2017 · 4 posts · 2 votes
    7y

    I hope so William st needs some love

    We need someone like you over there so you can reason with the neighborhood and scare away the ones that you can’t work with

    Also bring in those new people with a vision for change 

    I do my best but I don’t really try to chase the druggies or dealers away (I have no time I’m working and it’s dangerous fighting with people that have nothing to lose)

    I open the doors and turn the lights on That usually moves them down the street

    I might have the occasional argument once in a while

    I don’t really like the hiroin addicts Or the crackheads or alcoholics dealing with them is hard

    That is a whole new health issue working in and around these buildings

    Forget about lead, asbestos ,mold or just breathing the construction dust and the dangers of the job

    What about when we come across drug  Needles ,condoms, human  feces,People  sleeping in abandoned buildings that want to attack you when you tell them they have to leave 

    Newburgh is rough but I love my job 

    1Reply
  • Michael Ealy
    Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes
    6y
    Originally posted by @John Hickey:

    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.

    Hi John,

    I started a thread just to expand on this. There are so many "investing rules" that people just "regurgitate" after hearing them or reading them here on BP. But, you and I sometimes don't follow some of those rules and we make money anyway. :)

    Here's the forum thread I just started about it. Feel free to share what you do my friend:

    https://www.biggerpockets.com/forums/432/topics/763669-investing-rules-and-times-you-violated-them-and-made-money

    1Reply
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