The housing stock in NJ/Philadelphia in my view is limited and generally, the majority of properties are dogs for the following reasons:
1. Architecturally hideous
2. Rehabbing the interior doesn't make it look better and its still a dog with nice innards and typically without a garage.
3. I'm looking at 2 properties now, one a large Victorian home which someone bought for way too much money in 2007 thinking the neighborhood would coming roaring back due to outside investment. Its close to the small original down area which has disappeared..the original bank is boarded up and other businesses closed and area (waterfront has a nice walk)has been waiting for further development since the mid 90's. The investment never occurred and could in the future but it isn't looking good. As far as I can tell (I've personally seen the outside/picture only for the inside) and its not a gut job...its a remove wall paper, paint walls,remove carpet on stairs/lightly sand and refinish floors job with a large lot that would look if 2 nasty trees are removed and includes an elegantly shaped and I believe well maintained pool, The front steps need pointing but are solid and if I pressure the concrete (all solid) it will look much better. The siding is inappropriate for this victorian home, but somebody spent a lot on the aluminum siding and storm windows outside the original windows and is respectably maintained. There are still homes occupied in the neighborhood and some not occupied (slight disrepair...ugly yards) People still live there and maybe I'm altruistically naive, foolish, and altogether stupid but my thought is in this neighborhood who wouldn't want to live in this house once I do my moderate fixup and spruce up the yard on the cheap....nothing more than fertilize and overseed the lawn..... I would like your thoughts on the built in pool....massive liability risk and fill it in or keep it if the equipment is serviceable/easily repaired?
The second home is a few blocks away and also has a large yard requiring tree removal and minor clean-up to look good....Its a 2BR/1BR brick faced range with an enclosed breezeway with entrance door/jalousie window separating the house from an attached garage. Architecturally, it has a decent big yard, full basement with a few pipes missing and some water....due to whatever event...I haven't gotten inside yet. Its cheap and in a lower middle class neighborhood and not altogether hopeless. It does need a new roof but on a simple ranch shouldn't be expensive to replace and the exterior is generally maintenance free brick/masonry. I think many are turned (I took my parents with me and my mom wasn't too excited) but in my view opportunity always comes from meeting a need and I think would be helping both neighborhoods tremendously. Does 1 home make a difference in a neighborhood? In the better neighborhoods there aren't bargain price homes with room to improve because the affordably is hampered by our property taxes based on 29.00/1000.00 of value. I just cannot buy into the "added value" concept J.Scott works in other states but I buy into Al Williamson (show #8) where getting involved in neighborhoods and making your presence known can make a difference.
I apologize for the poor editing...a couple sentences are missing phrases like
"yard would look good", "pressure wash concrete", "architecturally balanced appearance meaning its not hideous looking", and maybe a sentence like, "How hard is it to solder a couple copper pipes in the basement to replace ones stolen...no it isn't Detroit, Josh but it you can see it from here (just kidding)". But you are smart people and would've figured it out anyway.
Carl, honesty, I'd probably pass on both houses and keep looking. You didn't mention the size of the Victorian. The pool and the fact that it might become the best house on the block are two red flags for me. And the second one I wouldn't want just because a 2BD/1 BA is a very saturated market, at least in my area. I'd be looking for an ugly corner lot or high visibility lot where you can make an exterior visual impact to the neighborhood, a block where you can target getting multiple properties to have more influence on a black rather than a neighborhood, and/or a property with something unique to set it apart (garage, extra bathroom, bedroom, etc) and attract a better tenant who will improve the neighborhood. I've found it is hard to influence a block with landlord influence over only one SFR.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.