Real Estate Developer · Los , Angeles · Member since 2010 · 53 posts · 6 votes
I wanted to get some thoughts on the following deal I am looking at:
The owner has verbally said he wants $60,000. I have not received any records of expenses yet. The owner is an older gentleman who is sick of the work required to maintain the property.
4 Large 1 Bedrooms: Current rents @ $485, Market is $450 - $700
This building is older and will need some work, but it is in good enough shape to be occupied. My friend has been living here for a year without an issue. On Street Parking only (Maybe put a parking pad in the back for the tenants?) and no Washer Dryer.
I am hoping to get the building for $50,000 and put ~$5K into each unit to fix it up and bringing rents to $550-600.
Real Estate Investor · Moncton, New Brunswick · Member since 2012 · 25 posts · 3 votes
13y
A,B,C,D is the way many investors classify neighborhoods
"A" would be the most classy and "D" would be a war zone. "A" does not mean you would get the best return on your investment. I tend to stick to "B" and "C" areas.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
13y
$15k per door in a B area is great. Rent for 3-4% per month of your investment, also great. Gou have a friend living there with no issues. Separatly metered electric?
Real Estate Investor · Moncton, New Brunswick · Member since 2012 · 25 posts · 3 votes
13y
A,B,C,D is the way many investors classify neighborhoods
"A" would be the most classy and "D" would be a war zone. "A" does not mean you would get the best return on your investment. I tend to stick to "B" and "C" areas.
construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
13y
Jon Klaus and Tom Devost Thanks that does help. What would this classification be in the deal I am trying to work:
Bay front area totally wiped out by Hurricane Ike (only one house left standing in a 5 mile radius). BUt in the last four years there have been some buildings come back. Not as many as I would expect because it seems slow for an area that close to the water. (300- 1000 yds from ocean to bay) I am going to build a small RV park there.
Would this be a B with a potential to become an A?
Longview, TX · Member since 2012 · 368 posts · 131 votes
13y
Jon Klaus, are the A-D property classifications shown on the county's tax roles? I've looked till I've been blue in the face on how to interpret Harrison County's data, but haven't had much luck (although a call in to them wouldn't hurt). I take it that the area classifications can possibly be derived from the majority of property classifications but also may have an investor-subjective component to them?
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
13y
On yeah, there is subjectivity to the ratings and I don't ever recall municipalities using the ratings. There is a lot that can go into the ratings and areas change. Sometimes fast. I'm working in an Austin neighborhood that I'd call a D 10 years ago, but parts of it are looking like A now, but other parts still feel like D. I witnessed a street fight a couple weeks ago near new $400k homes going up. The people fighting won't live there long. They'll be priced out.
Fukuoka, Fukuoka · Member since 2012 · 148 posts · 29 votes
13y
What Tom said. B/C variants are where the cash flow is. You wanna speculate, go for A (but prepare to spend some money which may or may not return). Steer clear of hooDs unless you leave, breathe and walk them, or have a solid turnkey operator who does (and until you break those areas in, assume 50% vacancies too, and some extra maintenance costs). Whole different kinda gambling :)
Investor · Chicago, IL · Member since 2009 · 566 posts · 274 votes
13y
Billy,
Soulard is a solid historic area which can vary block by block. Is this your first rehab deal? I would imagine the property is 100+ years old based on the area. I would make sure your rehab number is extremely accurate unless you will be paying for continued maintenance for the life of the property. Historic brownstones are beautiful properties but require a lot of expertise....The St Louis Rehabbers Club offers a lot of great local advice.