St. Louis - How to keep occupancy with high rental competition?

11 Replies

I am looking to start investing in the St. Louis area. I am primary looking in in the south city area. With such a high amount of inventory available, what are some strategies others are using to maximize occupancy rates? There are products available across all the spectrum of quality so I'm struggling in trying to identify ways to differentiate. Any assistance would be greatly appreciated.    

Buy in the correct parts of south city and you should have much less vacancy, the demand for those areas is high and works itself out. 

Thank you so much! Curious, what areas would you suggest?

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 @Kyle Eckert, we are wanting to BRRRR the properties.

We are also struggling in determining a direction. We really want to improve communities, 

1. Should we just start focusing on the neighborhoods that look to have the greatest opportunity for improvement? Kings Way West, Kings Way East, The Ville, etc.. 

2. Area that look to have opportunity to turn around due to greater perimeter neighborhoods \ parks; West End, Central West End, Kings Oak, Gravois Park (Cherokee St.)

3. Area's that are higher class but less opportunity to BRRRR; Tower Grove South, St. Ann, St. Charles, St. Peters

Our strategy is to grow with multi family investments. Change neighborhoods, BRRRR for minimal capital investment, and maximize tenant stability. There are so many neighborhoods, we are starting to get into an analysis paralysis state. We will be traveling out to drive and walk the neighborhoods which is essential but again the area is so large and there are so many variables that we want to have focus when we arrive so that we don't waste time and can make decisions quickly and start.

Have you had any experiences with the neighborhoods above and or suggestions to my thoughts above? I'm not seeing a lot of comps in the lower class areas that are post rehab which is concerning for ARV.

Joshua Tikal

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@Joshua Tikal   

It looks like the last mention didn't link correctly, sorry for the delay.  I hope you found a direction to go in and I am curious.  I have looked into and driven around some of the fringe communities of STL and thought about what I could do to help improve the space.  

My advice if you are still going this route:

-I would say anything in between two nicer areas are a great target and have the shortest time to turnaround.

-Use a crime heat map to see how an area is, or the STL post dispatch murder map.  Very useful to see which area is shooty.

-Talk to the alderman of a ward you are looking to invest in if you are looking to help the community.  The aldermen are the key to each ward, and may know of more opportunities, and want all the money they can get flowing into their ward.

Let me know if I can help in any way, I am very interested to see how this turns out for you.

@Kyle Eckert thank you so much for the recommendations! I didn't think about the alderman of the ward. My wife and I are traveling out next week for a couple of days to get into the neighborhoods. We absolutely want to get to a point where we know the address ranges to focus and implement a high level of saturation so we can minimize the dependency on other investors for a positive impact.     

@Joshua Tikal One more thing, the STL LRA list is a great resource to see the health of a section of the city.

This is where properties go when nobody wants them, after the city auction.  Seeing how many abandoned properties are in a neighborhood tells you a lot.  Buildings here also sell for $1000/unit, which may be what you are looking for if you have the stomach for it.  For the most part they arent pretty.

I have searched the list fairly extensively if you want some recommendations.

@Kyle Eckert , thank you so much! I will review and reach out! Have you acquired properties from this source?  

@Joshua Tikal I haven't pulled the trigger on any yet, they are usually pretty rough and I don't have the tolerance right now for a project that involved.  But there are some neat old properties in some sketchy parts of town which need someone to save them, which kinda sounds along the lines of what you are looking to do.

Thank you @Kyle Eckert . We are absolutely wanting to make an impact and improve. With that said we also want to make sure we are successful. We will probably work on lower risk to start and dig deeper as we show success in our model but always looking for opportunities that make sense with the appropriate execution.

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