Elmwood Park, NJ · Member since 2015 · 11 posts · 1 vote
So obviously the "hood" is not the ideal place to invest in rental properties but how bad is it really? Can someone brake it down for me? What are the Pros and Cons and do the Cons out way the Pros or does it depend? Does anyone have any horror or success stories about their own experiences?
PS... I live in North Jersey and am sort of referring to the cities known as Passaic and Patterson
Some people say that "Ignorance is Bliss." However, sometimes, ignorance is just plain ignorance.
I have a duplex in a neighbor that many would call sketchy. I do my due diligence and screen all tenants. Background checks, in depth conversations (aka interviews) full reference checks both personal and business, and a favorable debt-to-inome ratio......a salary of three times the rent does no good if there is excessive credit card debt.) One tenant has been with me for 5 years and the other for two years. I have a 2% cash flow and hardly any maintenance fees because i rehabbed the house for safety and efficiency.
I manage it myself because I do not give them a need to call me for unreasonable repairs.
When people are treated with respect and an open communication is developed and maintained, a relationship is built that is based on trust and respect.
The bottom line is that if I don't treat them like crap, they don't treat me or my property like crap. Sometimes it is not about the neighborhood but simply about the people.
Your answers are both very informative. I thank you very much for making many things clear to me. My plan for my first deal is to indeed by a fourplex with an FHA loan and live in one of the units. I was just messing around on the mls and saw what seemed like a very good deal in the ghetto so I thought I'd get some feedback.
I have to agree with others who live in cities not large towns. The difference being where people choose to live depends a lot on several factors. Not always education and the lack thereof as suggested by some. For us here in Chicago I often hear people say to visitors don't go past 35th Street south; too dangerous. Well when I lived downtown, I wouldn't go to 35th. Its a lot to do with perception. Here far South has a very negative connotation, but I was in the area of the President's home with secret service and the whole nine yards looking at a property when shots rang out. Bad neighborhood? Nope million dollar homes. Literally. So you may as many have said invest in the path of progress. See who lives in the area. I was shocked to find that a very accomplished attorney I know lives in an area I consider suspect. It can be that way. Some people choose to live in a place for financial reasons, others familial. What ever offer them the best property YOU can afford. Make a plan and stick to it. I have an investor friend who rents condo-quality apartments to Section 8 tenants. They stay forever because its their plan to maintain their units. It can go both ways. Plan plan plan, have contingencies in place and make sure you're not being biased (as strong of a word as I will use on BP) as others seem to be.
Long story long, its real estate you can make money either way, but like any investment take care of the investment.