Cheap investment opportunities in a bad area

[Conner Roth]

I recently have been wondering about real estate opportunities in my area. I’m going to give some backstory about the town I’m looking to invest in and the area around it because I feel it’s pretty important information.

So I live outside of a pretty big town in PA. It used to be a very nice town and had a huge amount of residents due to the steel mill in the town. Then when the steel industry began to fall, the town did as well. The crime rate began to rise and eventually the town pretty much consisted of only low income families. Today the town is known to everyone in the county as “the bad/poor” part. This is pretty much purely reputation as the crime rate isn’t that high, but also the fact that every other area in this county is super wealthy. Anyways the school is one of the worst schools in the state despite having the most funding of any other school in my area. Property values have gone down pretty significantly while the values in every other school district in my county have gone up, which I believe is due to the school because of it’s bad reputation and no one wants their children to go there.

Okay that was a lot and I apologize but I feel some backstory was necessary.

So currently the talk of town is that investors other developers are trying to clean up the town and build new buildings and homes to drive up property values, which would force the low income families to leave. I believe this 100% because the same thing happened in another town in my county and now that towns current median household income is at about 100k a year.

Okay so finally the questions I have.

Do you guys believe that it would be smart to invest in cheap properties (<50000) now while they’re still cheap and hope that they are able to turn the town around? Does this sound so appealing and unique that I should take a huge risk and invest as much as possible in as many properties as possible? Do any of you have personal experience with a similar situation that you could share? Or does all of this have trouble written all over it?

Thank you for taking the time to read all that I know it was a lot but I’m very new to this and really would like advice on this. (And by the way I’m not looking to just go and buy property. I wouldn’t until I felt comfortable with knowing the ins and outs of real estate investing.)

[Dan Cox]

@Conner Roth

Conner, I’m just interested in what town you’re talking about. Is it Pottstown by chance?