Homes located in Felony Flats are starting to be listed as "close to Kendall Yards." If the Kendall Yards idea works out and the neighborhood starts actually becoming nice, here in the near future, would these homes be worth investing in?
I have read a lot of things that state "don't invest where you wouldn't live..." But there are houses in the area that pass the 50% rule with room to spare and could (if Kendall Yards succeeds) go way up in property value.
Any advice for a new investor?
I've looked at these areas as well and both of us being fresh RE investors here's my take - for the first couple flips/rentals I plan to do I want them to be easy "base hits" and I'm not looking to get a triple play or home run deals until I get my feet wet at least. Learn what contractors you trust and like to work with and create a network that you can rely on. Reading your profile it seems you've encountered this issue already before so make sure you find something with a low-to-you risk. Maybe you grew up near here or have family that does and you like the area then by all means go for it. I moved here a month ago from out of state and from every REI I've talked to they say avoid it like the plague. I'm curious to the idea of it though and I wouldn't be opposed to finding a place down there to work on, but the numbers would definitely have to work BEYOND WELL.
For the sake of being stereotypical, lets assume that the Felony Flats name exists for a reason. Factor into your pricing the potential for theft of tools and construction materials even in a locked box or room, vandalism of all sorts, and also factor in that potential buyers or renters also understand these stereotypes and will demand lower rents from you for living in a "less desirable neighborhood." Some contractors may flat refuse to work with you from prior bad experiences in the area or toss extra charges onto their bid to make it worth their time. Remember the world we live in isn't always sunshine and rainbows.
Maybe you want to invest here because you don't have the capital to score a place on South Hill or up north in Fairwood and in that case I would recommend looking to more creative methods of financing. You don't need to bear the purchase and construction costs all on your own - have some better financing help out with that.
Also, I found this post from your New Member Introduction and otherwise wouldn't have seen it. Make sure to set your own keywords like others have and be sure to mention them in your posts so they pop up in peoples' inboxes.
Any other Spokane, Coeur d'Alene, or Post Falls BPers want to chime in on this?
@Jayson Cornwell , have you driven through the area? I DO think the area will appreciate. However, that could be in two years, or that could be in 20 years. I know at least a dozen people who've moved to West Central over the past ten years to help serve that community—running nonprofits, starting churches, community gardens, etc. But it's a rough neighborhood—typically one of the poorest in the state with one of the highest rates of drug abuse and domestic violence. Will it turn around being so close to Kendall Yards and downtown? Sure it will. But the current "problem" members of the neighborhood have to go somewhere. With the rest of Spokane having a pretty strong market right now (almost frothy in some areas), where do they go? If you already have multiple generations living in a house, and you can't afford to move, you don't have a lot of options.
My good friend just built a 6-unit new-construction one block north. He's charging strong rents and it was a great investment. But, the day I was helping him lay sod, three different people came up to ask us with questions. "Did you see someone run by with a flat screen tv?" "Hey did you see someone ride by carrying three bikes" "Hey, did you see a guy run by in the last 5 minutes? He came in our front door and took all of our sets of keys for house, shop, and cars."
Jayson, I'd spend an evening down there. Have dinner at Veraci Pizza, maybe some ice cream at Brain Freeze, and then make your way up to the Backyard Bar on Broadway and stroll around for a bit. There's a big difference between Kendall Yards and the Centennial Trail compared to two blocks north.
I think there are some great investment opportunities in that area, but I'd base them on their potential right now. Any appreciation will simply be a bonus.
I work at the downtown jail (aka the center of Felony Flats). Honestly, the area doesn't have much more crime than the majority of Spokane's lower social economic population. Most people don't have an issue living there... But personally, I wouldn't be moving my family into that area. But the areas crime rate I think is the decline as they are trying to make the area more attractive.
My worry is that the plan doesn't work and the area gets worse!
I too, am looking at that area as the numbers can look attractive. However, I have checked out around 10 properties and every time I've been there, (usually spend about an hour at the property I'm looking at) I have seen some sort of crime or disturbence go on, from drug deals, to fist fights, to open theft, to domestic violence. That's what made me not pull the trigger in that area yet. I don't think I'm up for the higher maintenence a C or D neighborhood brings.
I have talked to a few other investors that have properties in that area and they can't even do credit checks, because then they said,"they wouldn't be able to rent the property out, because anyone that has decent credit doesn't want to live there."
I know that I will be investing eventually there, but I wouldn't reccomend this area for your first rental. Doing a flip is a differnet story though.
@Jayson Cornwell , @Landon Eskew ,@Scott Ellis , @Mike Hanneman , I see this is an older post and thought it might be a good time to ask, has your opinions/predictions change or remain the same? Have been looking from the outside in on the Spokane Washington market for sometime now and would like your current mind set on this topic. Thanks guys!
@Tony Wooldridge my opinion stays the same. It will make you money but there are less risky areas I'd park my money in. Take a weekend and drive up here to look around first before you commit.
My above prediction came true this last two years as well. I had a guy I know move in from South Carolina and bought a fixer for himself in West Central without touring the area. Got himself a junker of a cheap house and he was going to fix it up to live in and then maybe sell off at a later date. Had $25K worth of his personal tools stolen the second day he was there because he didn't think he had to lock things up that tight. His insurance wouldn't cover it either because he was "acting as a contractor instead of a homeowner" or whatever reason so he couldn't recover the cost of his tools.
Because we're in WA, he also pays his part-time laborers in weed which I thought was hilarious. Par for the course I suppose.
@Landon Eskew , thanks for the response. The son is now attending SFCC and we have been driving quite a few neighborhoods up there as of late. Hate to hear the story about your guy. However, like I tell my son all the time " You better be tough if you are going to be stupid" looks like your guy has been pretty toughened up as of late! ( No disrespect meant here!) However, paying your workers in Mary Jane is probably about what you would expect with a situation that you described. Thanks for your insight! I am going to be heading up there again this April to attend "Addicted to ROI: Spokane Investing Weekend. Hope this finds you well and thanks again for your reply.
paying his workers in weed... I bet I know exactly who stole his tools.
@David Clinton III this happened before I met him so it wouldn't have been someone I would have recommended haha.
I believe west central will see some more gentrification once Kendall Yards is completely built out. Once all the condos, apartments, and commercial spaces are finished and filled there will be no choice but for it to start leaking out into the neighborhood. So this is probably 3-5 years out in my opinion.
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