I often share this story with potential clients, investors, and those looking to start their real estate investment journey. My goal is simple: to illustrate why investing in lower-priced neighborhoods can be riskier and less rewarding than it seems. I had a client who owned five properties in these areas, all rented through Section 8. He purchased them about seven years ago for an average of $80,000 each. Since they needed renovations, he invested roughly $30,000 per property to make them rent-ready—bringing his total investment to $110,000 per unit. Once rented, he quickly encountered issues: non-payment, eviction filings, constant repairs, and tenant-related damages. Over seven years, he barely turned a profit. By the time he covered eviction costs, lost rental income, and re-renovated after tenant turnovers, any potential gains were erased. Seven years later, his properties had appreciated to about $130,000 each—a 62% increase on paper. Sounds good, right? Not exactly. Before listing each property, he had to invest another $15,000–$30,000 just to refresh them for sale. Despite holding them for seven years without making any real profit, his total investment per property had now ballooned to roughly $140,000. And that’s before factoring in selling costs—commissions, taxes, and closing expenses. When the numbers were tallied, he had actually lost about $10,000–$20,000 per property. Here’s the kicker: Had he simply bought the properties for $80,000, left them vacant for seven years, and only paid taxes and insurance (about $1,500 per year per property), his all-in cost would’ve been around $90,500. Even after spending $15,000 on a basic refresh, he could have sold for $130,000—without the headaches of evictions, repairs, and property management. And yet, after all expenses, he would have barely made a few thousand dollars. So, despite the 62% appreciation, he still lost money. And that’s not even accounting for the countless hours spent managing the properties. He was burned out. The Problem is two fold: • Cash Flow on Paper ≠ Real Cash FlowMany investors assume rental income will flow smoothly, but that’s rarely the case in high-risk areas. In Philadelphia, for example, landlords cannot deny a Section 8 tenant based on credit score—only for violent crimes or drug offenses. That means even applicants with a 400 credit score may qualify, increasing the risk of evictions, non-payment, and high maintenance costs. The projected returns often don’t materialize in real life. • Appreciation Is Misleading in Low-Value MarketsWhile values in these areas do rise, the percentage gains are deceiving due to low starting values. So even a whopping 62% increase is only 50k of a 80k property. • • What baffles me most is how easily people jump into these investments in unfamiliar neighborhoods - especially out of state! It’s like choosing to invest in a friend’s startup instead of the S&P 500—just because the startup promises big returns at a lower entry point. The logic doesn’t hold up... Let’s compare this with another investor who took a different approach. Seven years ago, Investor X purchased a duplex in a stronger market for $300,000. They invested $50,000 in cosmetic renovations, bringing their total investment to $350,000. From the start, they cash-flowed around $500/month, had minimal tenant issues, and turned a profit year after year with little management hassle. Keep in mind rents also went up and opportunities to refinance were also available - elevating that figure. Today, that duplex is worth $475,000–$500,000. If they sell, they barely need to renovate because the demand is high for high quality RE. Their appreciation profit alone is nearly $100,000, and that’s not even counting rental income earned over the years. With 100k there's plenty left over after commissions and closing costs are paid. Don’t chase high cash flow and "too good to be true" returns. If an investment looks too good to be true, it probably is. And please stop listening to gurus and paying them. it is their job to "sell" you something, not build a relationship with you. Its a lot harder to sell a $15,000 course that's titled: Invest in high quality assets and build solid equity vs "Passive income while you sleep - how section 8 helped me build a $100k/m portfolio" Good luck!

Lower tier rental properties are a profit center, unfortunately rarely for the owner. Just look at Alan's example which is an accurate depiction of how these properties often pan out when viewed through an extended time period. Regardless of whether the owner turns a profit, brokers are called up on to sell, lease and manage, lenders will finance, contractors (often affiliated with PM companies will be called upon to put out the constant fires). In fact, the more issues that arise, the more profitable theses properties become for the ancillary service providers....and you want to know why these investments are pushed aggressively by so many (besides of course requiring nothing more than a pulse to buy them).

@Alan Asriants VERY GOOD POST! Am so TIRED of trying to explain this to naive newbies who think they need to buy Class D rentals because that's all they can afford and S8 is going to solve all their cashflow problems! We try to help them as best we can, but then our name gets trashed when they don't get their paper results - because you know, EVERYTHING is the PMCs fault.

Great post. I would add that the problem extends beyond Class D properties. Twice I rented B class rentals to Section 8 residents. In both cases after they moved out I had to spend a lot to bring the property back to its previous condition. Those rehabs used up all the cashflow I had from their tenancy. I made zero profit from operating the property. At least I got good appreciation from those properties. These days, many state governments are trying to force more landlords to accept Section 8.

Thats a great point! I would even argue that Section 8 in Class B is even more of a silly mistake. When you have a solid tenant pool why choose from lower tier?

@Alan Asriants I hear you inferring a premise that one "can't" make $ or be successful in Sec8 investing. That's simply not true. @Mark Cruse is a living example to this. I myself as well was with a team that very successfully operated in sec8, at scale with multi-markets/states. Now if saying it's not simple, that sec8 rental business is NOT "mailbox money" I 1,000% agree and I believe Mark C. would as well. Sec8 investing is it's own business and if one neglects to PROPERLY operate it as such, yes there is going to be pain and suffering. Such is business in general. If you try to run a fine dining sit down like a McDonalds your gonna have troubles. That is the #1 issue I see in Sec8. And in the Sec8 Landlording world this has long been the issue. People with no real knowledge, experience or intent of engaging in it as it's own business segment. Novices focused on the "cheap" asset price and ASSUMING the "guaranteed rents" and significant tenant pool creates some "easy" stage of operating. I see people in red-hot A & B class asset's and areas do same/similar mistakes and suffer the consequences of ignorance and laziness. I have one group I am working with right now who have been hemorrhaging cash on a group of B-class asset's in an A-class market where I have a slew of properties ironically some just blocks away, that a running like champ's. The difference from my stellar portfolio and there's drenched in red, is in HOW we run operations. Is Sec8 a LOT more active than A-class, that should be a "Duh" moment, of course it is. But just because one has to use more intelligence, have greater care of methodology, have people skills, does not make it "bad". It's about FIT. Fitting a persons skills, resources, time and temperament with the investment/ business structure and requirements. Sec8 requires human skills. And in my experience there generally is no good PM to just hire out for Sec8 PM. I am sure there may be some out there but my experiences were failure after let-down after half-azz performance. We only realized success after internalizing it. There is such a thing as good people who just so happen to be poor. Poor in $ but not in character. They do exist. But again, I can't stress enough how Sec8 is a unique business model to itself. It's NOT passive, it's NOT "mailbox money", it's NOT for the "lazy" hand's off type who thinks there buying a paycheck. It's a BUSINESS. It's a tough business to operate, no doubt. But the differentiator is not the tenants or the assets themself, it's in the operator and the operations by far and above.

I believe I may be the only person successful at this Section 8 strategy based on the comments. 😆 From 1997 to 2008, I bought multiple properties for under $50K in rough areas of town. If anyone knows San Antonio and remembers areas like Five Palms, they know it was super rough in the '80s and beyond. I invested at most $5 per square foot on purchase for renovations, making the properties beautiful but using basic materials. Back then, I would run background checks on all tenants. I used NTN, or the National Tenant Network, and passed those costs onto potential tenants. My practice was to look at their vehicle and the condition of their current living situation. If they opened the car door and a body fell out, it was a no-go! Just kidding. 😆 You know what I mean. If their property and vehicle were clean inside and out, they were most likely approved. Many were leaving locations that were also Section 8, but perhaps the owner was selling. I would collect first and last month's rent, a deposit (equal to one month's rent), and a pet deposit from the tenant. I was receiving around $1K per month in rent. The tenants were responsible for all repairs (esp. in cases of negligence), and I conducted inspections monthly. In all those years, I only had one eviction for non-payespecially of their portion. I won the case when they didn't show up, but they moved out on their own by the court date. In fact, on my very first property near Ingram Park Mall, I initially didn’t want to rent to Section 8 tenants and opted for the general public. My first tenants were the worst I have ever experienced, and I quickly learned the eviction process. Because of that experience, I began renting to Section 8 tenants from then on. The key for me was being proactive: I screened all my tenants and conducted my due diligence prior to acceptance. I maintained a solid relationship with each tenant, even with the one I had to evict. Most stayed with me until I sold. So I didn't have too many turnover and get ready expenses. And to the point made by poster, #3, I agree: you have to know where you're investing. Back then, I also had quadplexes, and I even rented a one-bedroom apartment to Section 8. He, along with most, if not all, of my tenants, were great. These single-family homes, when purchased correctly, provided me with more profit than any other area of town. Today, I don't buy and hold, but I felt I had it down to a science. There was a seven-year waitlist for demand during those years; I'm not sure about the current situation, but I would want to do it again... However, today's numbers and inflation could make this poster's post pretty accurate. "Big" Henry

Hello!I specialize in the D/F markets and have been for 15 years. Most people who lose money on Class D/F properties are usually just bad landlords. They don't know how to work the contractors, the tenants, and the areas. 90% of my properties are class D/F and I make great money. Especially on S8. I rent the rest of my A, B, and C properties on S8 as well. Most people just blame the area, the people, and whatever BS reason and refuse to accept they suck at landlording. It is a skill like anything else. Hopefully this thread doesn't discourage anyone from buying D/F properties. As one man's trash is another man's gold. As long as you know how to do it properly. Cause I could do an entire article on why I hate Class B and Above properties. LOL. Thanks for reading. L. Thomas

@Brian Bisdorf Of course can conduct your own diligence. Sure, some voucher recipients game the system (years ago, I had a tenant who knew exactly how many hours she could work and how much income she could earn to remain on the program). She was certainly able to hold employment. Most on the other hand are not responsible individuals, are not educated, do not work which means they are going to be spending most of their time home causing additional wear and tear. The houses get beat up far more than say a 1 bedroom apartment because they are larger households occupying them and in many instances additional family members not on the voucher live with them as well without the landlords knowledge. This is the reality of the lifestyle of the typical tenant. The question you have to answer is why resort to section 8 or even consider section 8? Many view section 8 as a security blanket because of the government subsidized rent and turn to the program because the neighborhood tenant base is deemed even riskier. If that's the category you fall within (especially if this was intended to be a flip), there is a real estate problem that must first be recognized and dealt with. Furthermore, if this is not a property where meaningful appreciation is expected in the near future I would recommend selling. Even if you aren't achieving the return you anticipated. Renting is just pushing an issue down the road and can very well become a more costly mistake.

Why Class D/Section 8 returns are not as good in Real Life vs on Paper - Real example

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Why Class D/Section 8 returns are not as good in Real Life vs on Paper - Real example

Alan AsriantsBusiness Member

Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes

I often share this story with potential clients, investors, and those looking to start their real estate investment journey. My goal is simple: to illustrate why investing in lower-priced neighborhoods can be riskier and less rewarding than it seems.

I had a client who owned five properties in these areas, all rented through Section 8. He purchased them about seven years ago for an average of $80,000 each. Since they needed renovations, he invested roughly $30,000 per property to make them rent-ready—bringing his total investment to $110,000 per unit.

Once rented, he quickly encountered issues: non-payment, eviction filings, constant repairs, and tenant-related damages. Over seven years, he barely turned a profit. By the time he covered eviction costs, lost rental income, and re-renovated after tenant turnovers, any potential gains were erased.

Seven years later, his properties had appreciated to about $130,000 each—a 62% increase on paper. Sounds good, right?

Not exactly.

Before listing each property, he had to invest another $15,000–$30,000 just to refresh them for sale. Despite holding them for seven years without making any real profit, his total investment per property had now ballooned to roughly $140,000. And that’s before factoring in selling costs—commissions, taxes, and closing expenses. When the numbers were tallied, he had actually lost about $10,000–$20,000 per property.

Here’s the kicker: Had he simply bought the properties for $80,000, left them vacant for seven years, and only paid taxes and insurance (about $1,500 per year per property), his all-in cost would’ve been around $90,500. Even after spending $15,000 on a basic refresh, he could have sold for $130,000—without the headaches of evictions, repairs, and property management. And yet, after all expenses, he would have barely made a few thousand dollars.

So, despite the 62% appreciation, he still lost money. And that’s not even accounting for the countless hours spent managing the properties. He was burned out.

The Problem is two fold:

Cash Flow on Paper ≠ Real Cash Flow
Many investors assume rental income will flow smoothly, but that’s rarely the case in high-risk areas. In Philadelphia, for example, landlords cannot deny a Section 8 tenant based on credit score—only for violent crimes or drug offenses. That means even applicants with a 400 credit score may qualify, increasing the risk of evictions, non-payment, and high maintenance costs. The projected returns often don’t materialize in real life.
Appreciation Is Misleading in Low-Value Markets
While values in these areas do rise, the percentage gains are deceiving due to low starting values. So even a whopping 62% increase is only 50k of a 80k property.
What baffles me most is how easily people jump into these investments in unfamiliar neighborhoods - especially out of state! It’s like choosing to invest in a friend’s startup instead of the S&P 500—just because the startup promises big returns at a lower entry point. The logic doesn’t hold up...

Let’s compare this with another investor who took a different approach.

Seven years ago, Investor X purchased a duplex in a stronger market for $300,000. They invested $50,000 in cosmetic renovations, bringing their total investment to $350,000. From the start, they cash-flowed around $500/month, had minimal tenant issues, and turned a profit year after year with little management hassle. Keep in mind rents also went up and opportunities to refinance were also available - elevating that figure.

Today, that duplex is worth $475,000–$500,000. If they sell, they barely need to renovate because the demand is high for high quality RE. Their appreciation profit alone is nearly $100,000, and that’s not even counting rental income earned over the years. With 100k there's plenty left over after commissions and closing costs are paid.

Don’t chase high cash flow and "too good to be true" returns. If an investment looks too good to be true, it probably is. And please stop listening to gurus and paying them. it is their job to "sell" you something, not build a relationship with you. Its a lot harder to sell a $15,000 course that's titled: Invest in high quality assets and build solid equity vs "Passive income while you sleep - how section 8 helped me build a $100k/m portfolio"

Good luck!

[email protected]267-767-0111

Alan Asriants - New Century Real Estate 590 Reviews

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Eric Gerakos

Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes

I have been preaching this on BP for years. Fewer but better properties. Unfortunately, many new investors drool over how many crapboxes they can buy and brag to their friends about owning. After ignoring advice, their next post is often, “How do I evict my non paying tenant?” Or the always popular, “My tenant moved out and stole my washer, dryer, water heater and light fixtures!!!”

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Jesus Santoyo
Member since 2021 · 49 posts · 29 votes
1y
Yes and Yes @Alan Asriants ; however, I ask one question to the community? well, two? I suppose: Why did you get into this business? Second, what impact are you making in your community? I agree sections C and D don't provide the best ROI on the Excel spreadsheet - However, Is that couple hundred dollars more going to impact you? I been an investor for only a few years and I have a few rentals here in the North Lawndale area in Chicago some will characterize this areas as D class- Do I make good money out of my rentals, Yes! Are there issues with turnover, crime, quality of life? Absolutely! ... To be honest - I am a prolific house hacker who has a great W2 job making over 6 figures and has a property in an A-class neighborhood that I am renting. Yet, to be fully honest, I love living here! Why- You may ask? I see the changes happening in the area day to day-- Its beautiful to see the impact youself while you go for a run on a saturday morning. The fact that you(who has been blessed with more than others) can make an impact to your neighbors house, to a tenant by being caring and understanding that I will not trade for anything! I understand there is a bit more hard work, but it is nice to see the community grow- If you are looking just in the business sense well, appreciation has gone 200% plus, and my annual rent continues to increase 6-10%.
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Eric James
Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
1y
It isn't just bad neighborhoods. The first place I bought was a triplex in a B area. I lived in one unit and managed the other 2. During that time it cash flowed well. But when I moved out of state and had to pay a PM and contractors for all work that needed to be done I only broke even on it. I sold it a few years ago and did clear $60k gain. Self managing rentals in the area I live in I don't have to pay to place tenants, can see for myself what work needs to be done at turnovers and either do it myself or have an employee on payroll do it for little cost. It's a world of difference than long distance investing.
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
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@Mark Cruse My position on lower tier real estate has been consistent. The real estate is disproprotionately impacted by expenses requiring a more hands on approach. For this reason its difficult to operate these properties sustainably over a long period of time. It becomes even more difficult to operate these properties when investing on small scale out of state reliant on 3rd party vendors which is how most on BiggerPockets become involved in owning these properties.

Perhaps your understanding of the community and tenant gives you an upper hand but by your own admision you self manage. This is how you compensate for the disproportionate expenses. Your communication skills and understanding of the community do not take care of cap ex, pay for fixed operational costs etc. You also say its been smooth sailing yet in the same post aknowldged your approach has weared on your mentally which is why you are "upgrading"...presumably to better asset classes.

The point I've been making all along is you can succeed in these neighborhoods, but its very difficult to do so without being incredibly hands on. You've had success operating these properties but your story is the playbook I've been preaching of how it can be done. Unfortunately its not the playbook most sign up for when they are purchasing these properties believing real estate can be passive (not that any real estate is truly passive, but this asset class in particular is one of the least passive to operate).
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- Mark Cruse
  Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
  1y
  Quote from @Stuart Udis:
  
  @Mark Cruse My position on lower tier real estate has been consistent. The real estate is disproprotionately impacted by expenses requiring a more hands on approach. For this reason its difficult to operate these properties sustainably over a long period of time. It becomes even more difficult to operate these properties when investing on small scale out of state reliant on 3rd party vendors which is how most on BiggerPockets become involved in owning these properties.
  
  Perhaps your understanding of the community and tenant gives you an upper hand but by your own admision you self manage. This is how you compensate for the disproportionate expenses. Your communication skills and understanding of the community do not take care of cap ex, pay for fixed operational costs etc. You also say its been smooth sailing yet in the same post aknowldged your approach has weared on your mentally which is why you are "upgrading"...presumably to better asset classes.
  
  The point I've been making all along is you can succeed in these neighborhoods, but its very difficult to do so without being incredibly hands on. You've had success operating these properties but your story is the playbook I've been preaching of how it can be done. Unfortunately its not the playbook most sign up for when they are purchasing these properties believing real estate can be passive (not that any real estate is truly passive, but this asset class in particular is one of the least passive to operate).
  
  Ok, we concur. I don't disagree. Most of what you say here is cool outside of the capex comment. If all your tenants are performing well, with the killer cashflow that comes with it, this capex is ok. However, I do get what you are saying. Many don't sign up for this because it does take way more to make it work. Its wearing on me mentally because as I get older, I don't want to deal with the extra that comes along with it. When I was young, I needed to low entry point. I don't need that now. Even though the remaining Class Ds still work, you know it can go sideways at any moment. I can handle that, but dont need to anymore. I want it to be easier. Still if you have the skill sets to make this work, and feel like doing it, you can become wealthy on a faster track.
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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
1y
@Alan Asriants I hear you inferring a premise that one "can't" make $ or be successful in Sec8 investing.

That's simply not true. @Mark Cruse is a living example to this. I myself as well was with a team that very successfully operated in sec8, at scale with multi-markets/states.
Now if saying it's not simple, that sec8 rental business is NOT "mailbox money" I 1,000% agree and I believe Mark C. would as well.
Sec8 investing is it's own business and if one neglects to PROPERLY operate it as such, yes there is going to be pain and suffering. Such is business in general. If you try to run a fine dining sit down like a McDonalds your gonna have troubles.
That is the #1 issue I see in Sec8. And in the Sec8 Landlording world this has long been the issue. People with no real knowledge, experience or intent of engaging in it as it's own business segment. Novices focused on the "cheap" asset price and ASSUMING the "guaranteed rents" and significant tenant pool creates some "easy" stage of operating.
I see people in red-hot A & B class asset's and areas do same/similar mistakes and suffer the consequences of ignorance and laziness.
I have one group I am working with right now who have been hemorrhaging cash on a group of B-class asset's in an A-class market where I have a slew of properties ironically some just blocks away, that a running like champ's.
The difference from my stellar portfolio and there's drenched in red, is in HOW we run operations.
Is Sec8 a LOT more active than A-class, that should be a "Duh" moment, of course it is.
But just because one has to use more intelligence, have greater care of methodology, have people skills, does not make it "bad".
It's about FIT.
Fitting a persons skills, resources, time and temperament with the investment/ business structure and requirements.
Sec8 requires human skills.
And in my experience there generally is no good PM to just hire out for Sec8 PM. I am sure there may be some out there but my experiences were failure after let-down after half-azz performance. We only realized success after internalizing it.
There is such a thing as good people who just so happen to be poor. Poor in $ but not in character. They do exist.
But again, I can't stress enough how Sec8 is a unique business model to itself. It's NOT passive, it's NOT "mailbox money", it's NOT for the "lazy" hand's off type who thinks there buying a paycheck. It's a BUSINESS.
It's a tough business to operate, no doubt.
But the differentiator is not the tenants or the assets themself, it's in the operator and the operations by far and above.
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Jonathan KlemmBusiness Member
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Contractor · Chicago, IL · Member since 2016 · 4k+ posts · 2k+ votes
1y
WE need to continue to boost this post up to the top! Great share @Alan Asriants!
This is especially true for out-of-state or newbie investors here in Chicago who see the cashflow numbers on the south and west sides of the city.
I personally have dealt with a 26 unit build that sank into the bottom of the ocean...it's not fun.
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JJ P.
Real Estate Agent · San DIego · Member since 2019 · 177 posts · 185 votes
1y
There’s some very good insight in this thread.
I’ve considered cashing out on our San Diego Class A ages for the high returns of other areas. We already did that in Oregon and doubled our cash flow but stalled out on the appreciation. Our small town Oregon houses are nice, class A, I suppose, but the economy is just tremendously different. Our expectations had to pivot according and that’s not even when targeting/catering to lower income people.
Class D-F purchases can be a great way to get started with limited finances, but it really is a Baptism by Fire. We developed our landlording skills over years and made lots of mistakes along the way. If we’d started out with challenging properties and tenants, I don’t think we’d have ended up sticking it out.
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- Alan AsriantsBusiness Member
  OP
  Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
  1y
  Quote from @JJ P.:
  
  There’s some very good insight in this thread.
  I’ve considered cashing out on our San Diego Class A ages for the high returns of other areas. We already did that in Oregon and doubled our cash flow but stalled out on the appreciation. Our small town Oregon houses are nice, class A, I suppose, but the economy is just tremendously different. Our expectations had to pivot according and that’s not even when targeting/catering to lower income people.
  Class D-F purchases can be a great way to get started with limited finances, but it really is a Baptism by Fire. We developed our landlording skills over years and made lots of mistakes along the way. If we’d started out with challenging properties and tenants, I don’t think we’d have ended up sticking it out.
  
  Exactly, most don't survive long because the headache and the actual returns burns them.
  it's possible that people consider Class C and D differently and in the Midwest where the avg home costs 100k, buying an 80k home really isnt a horrible area. But in the NE, that is a risky asset
  [email protected]267-767-0111
  Alan Asriants - New Century Real Estate 590 Reviews
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Samuel CoronadoPro Member
Investor · Huntsville, AL · Member since 2016 · 334 posts · 181 votes
1y
The issue is not the Class of the property. The issue is people try to skimp on properly vetting tenants. I have people in a mobile home park who pay on time every time and take care of the properties very well. I've also had people in a nice house on acreage skip out and leave it infested with roaches. haha.
Proper management cures most of these.
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- Alan AsriantsBusiness Member
  OP
  Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
  1y
  Quote from @Samuel Coronado:
  
  The issue is not the Class of the property. The issue is people try to skimp on properly vetting tenants. I have people in a mobile home park who pay on time every time and take care of the properties very well. I've also had people in a nice house on acreage skip out and leave it infested with roaches. haha.
  Proper management cures most of these.
  
  Class of area determines class of tenant, they are directly proportional. Class A tenant with 800 credit score, perfect landlord references, and a 6 figure income will not live in a Class D area.
  [email protected]267-767-0111
  Alan Asriants - New Century Real Estate 590 Reviews
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- Samuel CoronadoPro Member
  Investor · Huntsville, AL · Member since 2016 · 334 posts · 181 votes
  1y
  Quote from @Alan Asriants:
  
  Quote from @Samuel Coronado:
  
  The issue is not the Class of the property. The issue is people try to skimp on properly vetting tenants. I have people in a mobile home park who pay on time every time and take care of the properties very well. I've also had people in a nice house on acreage skip out and leave it infested with roaches. haha.
  Proper management cures most of these.
  
  Class of area determines class of tenant, they are directly proportional. Class A tenant with 800 credit score, perfect landlord references, and a 6 figure income will not live in a Class D area.
  
  I 100% disagree with that. I have clinical psychologists from Huntsville Hospital living in my MHPs because they're paying off student loans with a fury that would tickle Dave Ramsey. I also have a guy with 85-95k salary (mulligan on the 6 figure) with great credit that also lives in the park because he wants to be closer to family. These guys were vetted same as my Class A properties, but just live in a different mode where they understand getting a lower personal housing cost is in their favor long term, especially if they're young (35 and under).
  1 Reply
Henry Lazerow
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
1y
I see people talking about good credit tenants and screening but real life from owning c/d rentals those applicants don’t exist. No one with good credit wants to live in a bad area, maybe your properties are really class B. It’s even hard to get the sec 8 tenants to apply sometimes as they get to pick where live and want be in the nicer areas also.
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- James Hamling
  Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
  1y
  Quote from @Henry Lazerow:
  
  I see people talking about good credit tenants and screening but real life from owning c/d rentals those applicants don’t exist. No one with good credit wants to live in a bad area, maybe your properties are really class B. It’s even hard to get the sec 8 tenants to apply sometimes as they get to pick where live and want be in the nicer areas also.
  
  For sec8 tenants, if anything I want to see BAD credit not good.
  I mean, I don't really want to see that but what I look for in sec8 screening is COMPREHENSION.
  I want to see a story of what put them in that situation that makes sense. And is a "good" reasoning for it.
  For example, my favorite is always the aged. They followed the rules, worked a blue collar job, did what they could, didn't do university, never achieved much but never did big wrongs per say either, and now on S.S. and work PT, just struggling to make ends meet.
  I can get that. I can understand that. And I can rent to that.
  When it's a 20-something full of attitude and demands. Has 0 ambition or actions to take any ownership of there life. 3, 4, 5+ kids by a laundry list of "baby daddies" you know it's hell-on-wheels. That there gonna be bringing in trash baby daddy 6, 7, 8 etc..
  The screening is much more people skills related, understanding people, reading people, gauging there intentions.
  1 Reply
- Alan AsriantsBusiness Member
  OP
  Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
  1y
  Quote from @James Hamling:
  
  Quote from @Henry Lazerow:
  
  I see people talking about good credit tenants and screening but real life from owning c/d rentals those applicants don’t exist. No one with good credit wants to live in a bad area, maybe your properties are really class B. It’s even hard to get the sec 8 tenants to apply sometimes as they get to pick where live and want be in the nicer areas also.
  
  For sec8 tenants, if anything I want to see BAD credit not good.
  I mean, I don't really want to see that but what I look for in sec8 screening is COMPREHENSION.
  I want to see a story of what put them in that situation that makes sense. And is a "good" reasoning for it.
  For example, my favorite is always the aged. They followed the rules, worked a blue collar job, did what they could, didn't do university, never achieved much but never did big wrongs per say either, and now on S.S. and work PT, just struggling to make ends meet.
  I can get that. I can understand that. And I can rent to that.
  When it's a 20-something full of attitude and demands. Has 0 ambition or actions to take any ownership of there life. 3, 4, 5+ kids by a laundry list of "baby daddies" you know it's hell-on-wheels. That there gonna be bringing in trash baby daddy 6, 7, 8 etc..
  The screening is much more people skills related, understanding people, reading people, gauging there intentions.
  
  Agreed here. I have found very nice older couple on Section 8, but those candidates are very far and few in between. 99% are the later that you described, at least in my area.
  [email protected]267-767-0111
  Alan Asriants - New Century Real Estate 590 Reviews
  View Page
  1 Reply
Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
@Lucas Thomas

1. Anyone who relies on the 1% rule needs to be educated

2. This was a 10 condo ground up project I developed. I sold 7 units and retained the A1,B1 and C1 units. Paid off the construction loan in full and exited my LP investors with the first 7 sales and then took on new low levered debt on the three units I kept. I believe my current loan balance is $915,000 across all three units.  The two similar line units that I sold traded for $480,000 & $490,000 respectively and the neighborhood has appreciated since March/April 2022 when those untis sold. I also retained seven surplus parking spaces that have separate tax ID's. I am preparing to break ground on two townhoms across the street at 22 E Durham and each will recieve two deeded spaces. The remaining three parking spaces will be deeded to the A1, B1, C1 units when I choose to sell and each will get 2 deeded parking spaces. That should push those sales well over $500k. The 2 line units have roofdecks and sell for about $50K more historically.

3. In Philadelphia there is a tax abatement to incentivize new construction. The legislation has changed but my 23 Durham condo units qualify under the former legislation. My tax bills are under $2k/year per unit.

4. You are looking at assessed values not my cost as I explained above. Almost hitting your arbitrary 1% rule. :)

5. You are just looking at the A1 unit.  I just re-leased the B1 unit after the previous tenant was there since February of 2022. MY C1 unit similarly has been leased by the same tenant since February of 2022 and remains. Turnover consists of touch up paint and cleaning. In and out, no cap ex because these are 3 year old units.

5. Are you really going to double down on cap ex and operational costs not disproprotionately impacting lower cost real estate?

6. Are you saying that if you by lousy real estate in non "landlord friendly states" as you put it there's no responsbility to address cap ex or operations? At best you are just putting duct tape on issues. You sound like a wonderful landlord any tenant would love to have...

You can keep chasing your 1% cash flow in crappy neighborhoods with ductape repairs.  I will take quality of life, take pride in ownership in the assets I own and know the equity I've accumulated can easily convert to cash whenever I want.

[email protected]
2 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Stuart Udis:
  
  @Lucas Thomas
  
  1. Anyone who relies on the 1% rule needs to be educated
  
  2. This was a 10 condo ground up project I developed. I sold 7 units and retaind the A1,B1 and C1 units. Paid off the construction loan in full and exited my LP investors with the first 7 sales and then took on new low levered debt on the three units I kept. I believe my current loan balance is $615,000 across all three units.  The two similar line units that I sold traded for $480,000 & $490,000 respectively and the neighborhood has appreciated since March/April 2022 when those untis sold. I also retained seven surplus parking spaces that have separat tax ID's. I am preparing to break ground on two townhoms across the street at 22 E Durham and each will recieve two deeded spaces. The remaining three parking spaces will be deeded to the A1, B1, C1 units when I choose to sell and each will get 2 deedd parking spaces. That should push those sales well over $500k.
  
  3. In Philadelphia there is a tax abatement to incentivize new construction. The legislation has changed but my 23 Durham condo units qualify under the former legislation. My tax bills are under $2k/year per unit.
  
  4. You are looking at assessed values not my cost as I explained above. Almost hitting your arbitrary 1% rule. :)
  
  5. You are just looking at the A1 unit.  I just re-leased the B1 unit after the previous tenant was there since February of 2022. MY C1 unit similarly has been leased by the same tenant since February of 2022 and remains.
  
  5. Are you really going to double down on cap ex and operational costs not disproprotionately impacting lower cost real estate?
  
  6. Are you saying that if you by lousy real estate in non "landlord friendly states" as you put it there's no responsbility to address cap ex or operations? At best you are just putting duct tape on issues. You sound like a wonderful landlord any tenant would love to have...
  
  You can keep chasing your 1% cash flow in crappy neighborhoods with ductape rpairs.  I will take quality of life, take pride in ownership in the assets I own and know the equity I've accumulatd can easily convert to cash whenever I want.
  
  My friend,
  
  1. You need to be educated as you have yet to produce a PROPERTY you own that you PURCHASED that cashflows NOT BUILT!
  
  2. You committed cardinal Sin 2 AGAIN - Comparing Apples to Oranges.
  
  You can't compare a DEVELPMENT YOU BUILT to a secondary Market SFH.
  
  They are not the same. Masquerading your DEVELOPED A+ property as a "normal" transaction completely invalidates ALL of your arguments. You probably don't even own any D property and just giving an uneducated opinion.
  
  3. Cardinal Sin 2 again.
  
  4. Cardinal Sin 2 Again.
  
  5. Well I'm glad you can keep tenants around.
  
  "Stuttering.... 5." Yes. I am going to double down that with the  "Do Repairs in a manner that is legal and safe, but not cosmetically pleasing" works. It has worked for me for 15 years for my clients and myself. Expectations are different. This seems to be the cardinal sin you can't comprehend.
  
  6. I'm disclosing that I don't have experience in Pennsylvania. And yes. I avoid "non-landlord Friendly" States as 100% of my portfolio is on Autopilot and I don't have many issues. Especially not at the level and cost you are purporting.
  
  This will probably be my last post to you as you don't appear to own any of the discussions actual property type and are masquerading your developments against Secondary Market SFH.
  
  Been nice talking to you.
  
  Take care.
  
  1 Reply
- Robert EllisBusiness Member
  Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
  1y
  Quote from @Stuart Udis:
  
  @Lucas Thomas
  
  1. Anyone who relies on the 1% rule needs to be educated
  
  2. This was a 10 condo ground up project I developed. I sold 7 units and retained the A1,B1 and C1 units. Paid off the construction loan in full and exited my LP investors with the first 7 sales and then took on new low levered debt on the three units I kept. I believe my current loan balance is $915,000 across all three units.  The two similar line units that I sold traded for $480,000 & $490,000 respectively and the neighborhood has appreciated since March/April 2022 when those untis sold. I also retained seven surplus parking spaces that have separate tax ID's. I am preparing to break ground on two townhoms across the street at 22 E Durham and each will recieve two deeded spaces. The remaining three parking spaces will be deeded to the A1, B1, C1 units when I choose to sell and each will get 2 deeded parking spaces. That should push those sales well over $500k. The 2 line units have roofdecks and sell for about $50K more historically.
  
  3. In Philadelphia there is a tax abatement to incentivize new construction. The legislation has changed but my 23 Durham condo units qualify under the former legislation. My tax bills are under $2k/year per unit.
  
  4. You are looking at assessed values not my cost as I explained above. Almost hitting your arbitrary 1% rule. :)
  
  5. You are just looking at the A1 unit.  I just re-leased the B1 unit after the previous tenant was there since February of 2022. MY C1 unit similarly has been leased by the same tenant since February of 2022 and remains. Turnover consists of touch up paint and cleaning. In and out, no cap ex because these are 3 year old units.
  
  5. Are you really going to double down on cap ex and operational costs not disproprotionately impacting lower cost real estate?
  
  6. Are you saying that if you by lousy real estate in non "landlord friendly states" as you put it there's no responsbility to address cap ex or operations? At best you are just putting duct tape on issues. You sound like a wonderful landlord any tenant would love to have...
  
  You can keep chasing your 1% cash flow in crappy neighborhoods with ductape repairs.  I will take quality of life, take pride in ownership in the assets I own and know the equity I've accumulated can easily convert to cash whenever I want.
  
  I'm with Stuart. I never met any companies publicly traded that have to deploy billions of dollars that are buying old crappy houses unless they were built after a certain year. pooled capital likes low risk and this strategy of tenants that can barely make any money isn't the play. look at Blackstone one of the largest privately held reits they aren't deploying any dollars into this strategy. the majority is new construction which is by far a superior strategy than purchasing existing. individuals or companies who buy existing are typically intermediaries who's model relies on cash flow from day one and high returns from cash flow without a real value add strategy. in new construction you have so many more tools. The strength of new construction not only in just jobs but also in net value creation is unbelievable and can never be compared to existing houses. Cities change and most of the time houses are cheap when net migrations are negative. i used to own a demolition company and clean out company in Columbus Ohio and we used to clean up after section 8 tenants and I can't tell you how many times they did more damage to units or left more property than their security deposit covered and that their rent covered. owners would lose all the cash flow in one day when they had to pay us 3k for a cleanup. bad tenants are the worst kind. I left that part of the industry and existing inventory for all ground up construction and I personally have no plans to own individual investment properties ever again or invest in existing inventory. the only reason people do is because of their cash situation, the market they are in, or they have limited knowledge.
  [email protected]786-494-6766
  Section 8 Launch52 Reviews
  Website View Page
  0 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Robert Ellis:
  
  Quote from @Stuart Udis:
  
  @Lucas Thomas
  
  1. Anyone who relies on the 1% rule needs to be educated
  
  2. This was a 10 condo ground up project I developed. I sold 7 units and retained the A1,B1 and C1 units. Paid off the construction loan in full and exited my LP investors with the first 7 sales and then took on new low levered debt on the three units I kept. I believe my current loan balance is $915,000 across all three units.  The two similar line units that I sold traded for $480,000 & $490,000 respectively and the neighborhood has appreciated since March/April 2022 when those untis sold. I also retained seven surplus parking spaces that have separate tax ID's. I am preparing to break ground on two townhoms across the street at 22 E Durham and each will recieve two deeded spaces. The remaining three parking spaces will be deeded to the A1, B1, C1 units when I choose to sell and each will get 2 deeded parking spaces. That should push those sales well over $500k. The 2 line units have roofdecks and sell for about $50K more historically.
  
  3. In Philadelphia there is a tax abatement to incentivize new construction. The legislation has changed but my 23 Durham condo units qualify under the former legislation. My tax bills are under $2k/year per unit.
  
  4. You are looking at assessed values not my cost as I explained above. Almost hitting your arbitrary 1% rule. :)
  
  5. You are just looking at the A1 unit.  I just re-leased the B1 unit after the previous tenant was there since February of 2022. MY C1 unit similarly has been leased by the same tenant since February of 2022 and remains. Turnover consists of touch up paint and cleaning. In and out, no cap ex because these are 3 year old units.
  
  5. Are you really going to double down on cap ex and operational costs not disproprotionately impacting lower cost real estate?
  
  6. Are you saying that if you by lousy real estate in non "landlord friendly states" as you put it there's no responsbility to address cap ex or operations? At best you are just putting duct tape on issues. You sound like a wonderful landlord any tenant would love to have...
  
  You can keep chasing your 1% cash flow in crappy neighborhoods with ductape repairs.  I will take quality of life, take pride in ownership in the assets I own and know the equity I've accumulated can easily convert to cash whenever I want.
  
  I'm with Stuart. I never met any companies publicly traded that have to deploy billions of dollars that are buying old crappy houses unless they were built after a certain year. pooled capital likes low risk and this strategy of tenants that can barely make any money isn't the play. look at Blackstone one of the largest privately held reits they aren't deploying any dollars into this strategy. the majority is new construction which is by far a superior strategy than purchasing existing. individuals or companies who buy existing are typically intermediaries who's model relies on cash flow from day one and high returns from cash flow without a real value add strategy. in new construction you have so many more tools. The strength of new construction not only in just jobs but also in net value creation is unbelievable and can never be compared to existing houses. Cities change and most of the time houses are cheap when net migrations are negative. i used to own a demolition company and clean out company in Columbus Ohio and we used to clean up after section 8 tenants and I can't tell you how many times they did more damage to units or left more property than their security deposit covered and that their rent covered. owners would lose all the cash flow in one day when they had to pay us 3k for a cleanup. bad tenants are the worst kind. I left that part of the industry and existing inventory for all ground up construction and I personally have no plans to own individual investment properties ever again or invest in existing inventory. the only reason people do is because of their cash situation, the market they are in, or they have limited knowledge.
  
  Robert's Steps to Success:
  
  1. Buy Blackstone because real estate is too hard.
  
  2. STEP Two: See Step one.
  
  .....
  
  https://www.fastcompany.com/91020630/housing-market-blacksto...
  
  Plus Blackstone and its brethren DO buy SFHs. Mostly through intermediaries. They are also the ones who have ruined it for the rest of us by spearheading the insane price increases we see all over America that makes 90% of cities essentially "unbuyable" on an investment standpoint.
  
  And apparently Blackstone and I are more similar than anyone cares to admit.   "Safe and Legal, But not Cosmetically Pleasing" is a standard practice by them per the article excerpt below:
  "Blackstone catches flak
  Blackstone doesn’t always have the best of intentions when it rents out its houses and deals with its tenants’ problems, according to Tablet, an online magazine. In fact, giant landlord is accused of a host of sins.
  
  “The goal of institutional investors like Blackstone is to optimize profits,” the Tablet article said. “On the ground, that translates to maximum allowable rent increases, evictions, the rise of hidden fees, a reduced investment in complex maintenance, and even efforts to influence state and local housing policy.”"
  0 Reply
- Robert EllisBusiness Member
  Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
  1y
  Quote from @Lucas Thomas:
  
  Quote from @Robert Ellis:
  
  Quote from @Stuart Udis:
  
  @Lucas Thomas
  
  1. Anyone who relies on the 1% rule needs to be educated
  
  2. This was a 10 condo ground up project I developed. I sold 7 units and retained the A1,B1 and C1 units. Paid off the construction loan in full and exited my LP investors with the first 7 sales and then took on new low levered debt on the three units I kept. I believe my current loan balance is $915,000 across all three units.  The two similar line units that I sold traded for $480,000 & $490,000 respectively and the neighborhood has appreciated since March/April 2022 when those untis sold. I also retained seven surplus parking spaces that have separate tax ID's. I am preparing to break ground on two townhoms across the street at 22 E Durham and each will recieve two deeded spaces. The remaining three parking spaces will be deeded to the A1, B1, C1 units when I choose to sell and each will get 2 deeded parking spaces. That should push those sales well over $500k. The 2 line units have roofdecks and sell for about $50K more historically.
  
  3. In Philadelphia there is a tax abatement to incentivize new construction. The legislation has changed but my 23 Durham condo units qualify under the former legislation. My tax bills are under $2k/year per unit.
  
  4. You are looking at assessed values not my cost as I explained above. Almost hitting your arbitrary 1% rule. :)
  
  5. You are just looking at the A1 unit.  I just re-leased the B1 unit after the previous tenant was there since February of 2022. MY C1 unit similarly has been leased by the same tenant since February of 2022 and remains. Turnover consists of touch up paint and cleaning. In and out, no cap ex because these are 3 year old units.
  
  5. Are you really going to double down on cap ex and operational costs not disproprotionately impacting lower cost real estate?
  
  6. Are you saying that if you by lousy real estate in non "landlord friendly states" as you put it there's no responsbility to address cap ex or operations? At best you are just putting duct tape on issues. You sound like a wonderful landlord any tenant would love to have...
  
  You can keep chasing your 1% cash flow in crappy neighborhoods with ductape repairs.  I will take quality of life, take pride in ownership in the assets I own and know the equity I've accumulated can easily convert to cash whenever I want.
  
  I'm with Stuart. I never met any companies publicly traded that have to deploy billions of dollars that are buying old crappy houses unless they were built after a certain year. pooled capital likes low risk and this strategy of tenants that can barely make any money isn't the play. look at Blackstone one of the largest privately held reits they aren't deploying any dollars into this strategy. the majority is new construction which is by far a superior strategy than purchasing existing. individuals or companies who buy existing are typically intermediaries who's model relies on cash flow from day one and high returns from cash flow without a real value add strategy. in new construction you have so many more tools. The strength of new construction not only in just jobs but also in net value creation is unbelievable and can never be compared to existing houses. Cities change and most of the time houses are cheap when net migrations are negative. i used to own a demolition company and clean out company in Columbus Ohio and we used to clean up after section 8 tenants and I can't tell you how many times they did more damage to units or left more property than their security deposit covered and that their rent covered. owners would lose all the cash flow in one day when they had to pay us 3k for a cleanup. bad tenants are the worst kind. I left that part of the industry and existing inventory for all ground up construction and I personally have no plans to own individual investment properties ever again or invest in existing inventory. the only reason people do is because of their cash situation, the market they are in, or they have limited knowledge.
  
  Robert's Steps to Success:
  
  1. Buy Blackstone because real estate is too hard.
  
  2. STEP Two: See Step one.
  
  .....
  
  https://www.fastcompany.com/91020630/housing-market-blacksto...
  
  Plus Blackstone and its brethren DO buy SFHs. Mostly through intermediaries. They are also the ones who have ruined it for the rest of us by spearheading the insane price increases we see all over America that makes 90% of cities essentially "unbuyable" on an investment standpoint.
  
  And apparently Blackstone and I are more similar than anyone cares to admit.   "Safe and Legal, But not Cosmetically Pleasing" is a standard practice by them per the article excerpt below:
  "Blackstone catches flak
  Blackstone doesn’t always have the best of intentions when it rents out its houses and deals with its tenants’ problems, according to Tablet, an online magazine. In fact, giant landlord is accused of a host of sins.
  
  “The goal of institutional investors like Blackstone is to optimize profits,” the Tablet article said. “On the ground, that translates to maximum allowable rent increases, evictions, the rise of hidden fees, a reduced investment in complex maintenance, and even efforts to influence state and local housing policy.”"
  
  Since you have so many kids you probably didn't read much into either of these companies. Let me do it for you:
  Homebuyers of america average age of a property is 27 years and is worth $338k. As measured by value, 49.7% of the portfolio is concentrated in three states: Colorado (23.9%), Washington (14.3%), and Minnesota (11.6%)
  https://dbrs.morningstar.com/research/370160/dbrs-morningsta...
  Tricon residential average age is 29 years and $348k. As measured by broker price opinion (BPO) value, 67.7% of the portfolio is concentrated in three states: Georgia (29.8%), Arizona (19.5%), and Florida (18.5%).
  https://dbrs.morningstar.com/research/442890/morningstar-dbr...
  Those aren't D rentals bud. not by age, not by price, not by locations. These guys aren't pooling funds and buying D rentals in Cleveland ohio or Toledo ohio. you still shot yourself in the foot there's still no justification. between the two purchases they spent 9.5 billion dollars and they bought very nice, fairly new housing portfolios in strong tier 1 or tier 2 cities. D rentals on their own are in tier 3 cities I'd argue or the worst parts of tier 2 cities. I hope one of your businesses isn't real estate.
  There's a place for Blackstone and these other institutions in the marketplace. at the end of the day this is just a buy and sell of them. if you are anti Wall Street I can't help that. the point is that your D rental theory if that's what you are trying to prove isn't good. someone would be better off putting their money into a syndication and taking ownership in a nicer asset than this than putting together a class D rental and hoping for the best. all of these are newer than 1990 which is very new for housing. the houses you are talking about are going to be built prior to 1950 with deferred maintenance in very poor cities.
  [email protected]786-494-6766
  Section 8 Launch52 Reviews
  Website View Page
  0 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Robert Ellis:
  
  Quote from @Lucas Thomas:
  
  Quote from @Robert Ellis:
  
  Quote from @Stuart Udis:
  
  @Lucas Thomas
  
  1. Anyone who relies on the 1% rule needs to be educated
  
  2. This was a 10 condo ground up project I developed. I sold 7 units and retained the A1,B1 and C1 units. Paid off the construction loan in full and exited my LP investors with the first 7 sales and then took on new low levered debt on the three units I kept. I believe my current loan balance is $915,000 across all three units.  The two similar line units that I sold traded for $480,000 & $490,000 respectively and the neighborhood has appreciated since March/April 2022 when those untis sold. I also retained seven surplus parking spaces that have separate tax ID's. I am preparing to break ground on two townhoms across the street at 22 E Durham and each will recieve two deeded spaces. The remaining three parking spaces will be deeded to the A1, B1, C1 units when I choose to sell and each will get 2 deeded parking spaces. That should push those sales well over $500k. The 2 line units have roofdecks and sell for about $50K more historically.
  
  3. In Philadelphia there is a tax abatement to incentivize new construction. The legislation has changed but my 23 Durham condo units qualify under the former legislation. My tax bills are under $2k/year per unit.
  
  4. You are looking at assessed values not my cost as I explained above. Almost hitting your arbitrary 1% rule. :)
  
  5. You are just looking at the A1 unit.  I just re-leased the B1 unit after the previous tenant was there since February of 2022. MY C1 unit similarly has been leased by the same tenant since February of 2022 and remains. Turnover consists of touch up paint and cleaning. In and out, no cap ex because these are 3 year old units.
  
  5. Are you really going to double down on cap ex and operational costs not disproprotionately impacting lower cost real estate?
  
  6. Are you saying that if you by lousy real estate in non "landlord friendly states" as you put it there's no responsbility to address cap ex or operations? At best you are just putting duct tape on issues. You sound like a wonderful landlord any tenant would love to have...
  
  You can keep chasing your 1% cash flow in crappy neighborhoods with ductape repairs.  I will take quality of life, take pride in ownership in the assets I own and know the equity I've accumulated can easily convert to cash whenever I want.
  
  I'm with Stuart. I never met any companies publicly traded that have to deploy billions of dollars that are buying old crappy houses unless they were built after a certain year. pooled capital likes low risk and this strategy of tenants that can barely make any money isn't the play. look at Blackstone one of the largest privately held reits they aren't deploying any dollars into this strategy. the majority is new construction which is by far a superior strategy than purchasing existing. individuals or companies who buy existing are typically intermediaries who's model relies on cash flow from day one and high returns from cash flow without a real value add strategy. in new construction you have so many more tools. The strength of new construction not only in just jobs but also in net value creation is unbelievable and can never be compared to existing houses. Cities change and most of the time houses are cheap when net migrations are negative. i used to own a demolition company and clean out company in Columbus Ohio and we used to clean up after section 8 tenants and I can't tell you how many times they did more damage to units or left more property than their security deposit covered and that their rent covered. owners would lose all the cash flow in one day when they had to pay us 3k for a cleanup. bad tenants are the worst kind. I left that part of the industry and existing inventory for all ground up construction and I personally have no plans to own individual investment properties ever again or invest in existing inventory. the only reason people do is because of their cash situation, the market they are in, or they have limited knowledge.
  
  Robert's Steps to Success:
  
  1. Buy Blackstone because real estate is too hard.
  
  2. STEP Two: See Step one.
  
  .....
  
  https://www.fastcompany.com/91020630/housing-market-blacksto...
  
  Plus Blackstone and its brethren DO buy SFHs. Mostly through intermediaries. They are also the ones who have ruined it for the rest of us by spearheading the insane price increases we see all over America that makes 90% of cities essentially "unbuyable" on an investment standpoint.
  
  And apparently Blackstone and I are more similar than anyone cares to admit.   "Safe and Legal, But not Cosmetically Pleasing" is a standard practice by them per the article excerpt below:
  "Blackstone catches flak
  Blackstone doesn’t always have the best of intentions when it rents out its houses and deals with its tenants’ problems, according to Tablet, an online magazine. In fact, giant landlord is accused of a host of sins.
  
  “The goal of institutional investors like Blackstone is to optimize profits,” the Tablet article said. “On the ground, that translates to maximum allowable rent increases, evictions, the rise of hidden fees, a reduced investment in complex maintenance, and even efforts to influence state and local housing policy.”"
  
  Since you have so many kids you probably didn't read much into either of these companies. Let me do it for you:
  Homebuyers of america average age of a property is 27 years and is worth $338k. As measured by value, 49.7% of the portfolio is concentrated in three states: Colorado (23.9%), Washington (14.3%), and Minnesota (11.6%)
  https://dbrs.morningstar.com/research/370160/dbrs-morningsta...
  Tricon residential average age is 29 years and $348k. As measured by broker price opinion (BPO) value, 67.7% of the portfolio is concentrated in three states: Georgia (29.8%), Arizona (19.5%), and Florida (18.5%).
  https://dbrs.morningstar.com/research/442890/morningstar-dbr...
  Those aren't D rentals bud. not by age, not by price, not by locations. These guys aren't pooling funds and buying D rentals in Cleveland ohio or Toledo ohio. you still shot yourself in the foot there's still no justification. between the two purchases they spent 9.5 billion dollars and they bought very nice, fairly new housing portfolios in strong tier 1 or tier 2 cities. D rentals on their own are in tier 3 cities I'd argue or the worst parts of tier 2 cities. I hope one of your businesses isn't real estate.
  There's a place for Blackstone and these other institutions in the marketplace. at the end of the day this is just a buy and sell of them. if you are anti Wall Street I can't help that. the point is that your D rental theory if that's what you are trying to prove isn't good. someone would be better off putting their money into a syndication and taking ownership in a nicer asset than this than putting together a class D rental and hoping for the best. all of these are newer than 1990 which is very new for housing. the houses you are talking about are going to be built prior to 1950 with deferred maintenance in very poor cities.
  
  My point was that my strategy of "Safe and Legal, not cosmetically pleasing" is condoned by a BILLION dollar company.
  The only reason people are mad is because they are doing it in "Nice" Neighborhoods to "Good" people.
  So I'll end our conversation there as Blackstone and I are the same. I'm just the human being version of it.
  0 Reply
Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
@Lucas Thomas You completely missed the point of my initial side by side analysis. The lone point I was trying to get across was the disporoprotionate costs of operating real estate in lower tier neighborhoods and used two similar size housing units in the same market in different level neighborhoods to demonstrate this. You still can't seem to grap the concept. There are costs to owning real estate beyond duct tape repairs. Tax prep costs the same, a million dollars of liabilty insurance costs the same within the same market, many costs associated with buying and financing real estate cost the same or pretty darn close to it regardless if its a $150K or $450K house in a given market such as doc prep, appraisal, recording fees etc. Common area utilties don't cost more in an A vs. C location within the same neighborhood. You sound like a "I own 10 cap propery investor" translated as:

rent minus insurance, taxes and duct tape repairs =NOI/property value

I don't have to worry about being in a landlord friendly state with the types of real estate I own and how I operate my business. I am not worried about tenants playing games and taking advantage of what you deem tenant friendly laws. It seems like you can only operate in your fashion in certain parts of the country. To each their own, but not a business I care to be in.
[email protected]
3 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Stuart Udis:
  
  @Lucas Thomas You completely missed the point of my initial side by side analysis. The lone point I was trying to get across was the disporoprotionate costs of operating real estate in lower tier neighborhoods and used two similar size housing units in the same market in different level neighborhoods to demonstrate this. You still can't seem to grap the concept. There are costs to owning real estate beyond duct tape repairs. Tax prep costs the same, a million dollars of liabilty insurance costs the same within the same market, many costs associated with buying and financing real estate cost the same or pretty darn close to it regardless if its a $150K or $450K house in a given market such as doc prep, appraisal, recording fees etc. Common area utilties don't cost more in an A vs. C location within the same neighborhood. You sound like a "I own 10 cap propery investor" translated as:
  
  rent minus insurance, taxes and duct tape repairs =NOI/property value
  
  I don't have to worry about being in a landlord friendly state with the types of real estate I own and how I operate my business. I am not worried about tenants playing games and taking advantage of what you deem tenant friendly laws. It seems like you can only operate in your fashion in certain parts of the country. To each their own, but not a business I care to be in.
  
  This will be my last post for you.
  Stuart's Steps to Success:
  1. Get LARGE, LARGE Pile of money. From Somewhere... probably from a source outside of the normal man's realm.
  2. Become a Developer and have connections with developers.
  3. Find an A+ MULTI-Million Dollar Development opportunity with Tax Incentives that will make me wealthy.
  4. Tell people how easy it is to make money off a unique skill and situation that the 99% of us don't have access to and scold people like "me" who make money off of D Properties and how they work.
  5. "Just BUILD your OWN A+ Properties, Dummy. Its easy."
  
  Well, I should have thought about that Stuart. I should have just did that.
  Thank you for your advice.
  L. Thomas
  1 Reply
Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
No I don't have access to unlimited amounts of cash to invest like you may think but I was fortunate to work as an asset manager and then as an attorney for two organizations where I was surrounded by some of the most briliant real estate finance minds and learned real estate finance on an extremely high level. I made decent money for someone my age at both stops but I started buying $100K homes like most and from there built $350K duplexes and over time built a track record, formed banking relationships and continued to scale into more complexed and larger projects but it was the foundation that I learnd at those first two stops that greatly influenced the trajectory of my career.

Ironically its the equity you seem to think is chasing me that's actually my achilles heel. I operate in a space that's too small for true equity outside of friends and family and those relationships don't grow on trees so I make due with the relationships I have (which are comparable to most) and rely on my financing fundamentals and my knoweldge of zoning and land use to create imputed equity to compensate. Very different than the picture you tried to paint of me.

You do not need my background to apply the same approach of focusing on quality over quantity. Instead of accumulating a bunch of doors in crappy neighborhooods, buy fewer quality properties. Perhaps you can't BRRRR every deal and perhaps the spreadsheet cashflow isn't as strong but market fundamentals win out and layer onto the market fundamentals easier absorption of cap ex and operational expenses and real estate is not the rocket science most make it out to be. Most real estate investors work harder not smarter and this applies to owning in lower tier neighbohroods that lack the fundamentals more than any other property type.
[email protected]
0 Reply
Joe S.Pro Member
Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
1y
@Lucas Thomas

You’re actually a pretty good writer. With that being said, I think a number of members, including myself enjoyed reading your writing.
Hopefully you can come on the forms more often and add your perspective. I suspect that there’s not a lot of people that can manage class D properties as good as you or @Mark Cruse though.
0 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Joe S.:
  
  @Lucas Thomas
  
  You’re actually a pretty good writer. With that being said, I think a number of members, including myself enjoyed reading your writing.
  Hopefully you can come on the forms more often and add your perspective. I suspect that there’s not a lot of people that can manage class D properties as good as you or @Mark Cruse though.
  
  Well Hello Joe! :D
  
  I don't post much as I run 4 different businesses and have young kids.
  
  Rest is for the Wicked, and Sleep is for the Dead.
  
  L. Thomas
  2 Reply
Sebastian Bennett
Investor · Bucks County · Member since 2023 · 196 posts · 156 votes
1y
@Joe S. I wouldn't put @Mark Cruse and @Lucas Thomas in the same conversation of managing class d properties. Mark self managed so that he could provide a higher quality living experience for his tenants and from all accounts seemed to offer living conditions that were better than most in the class D world and treated his tenants with respect. Lucas on the other hand seeks out meth dens in war zones (his words) and treats the properties as just that. Claims to not have expenses like snow removal yet acknowledges he hires an outside PM company for his NE properties because weather shifts are too much for him to follow remotely. Makes it sound like paint is a cure-all for all repairs and somehow manages to sub meter common areas in his multi unit buildings. Claims he can only landlord his way in certain parts of the country. Apparently this makes him a landlord’s landlord whatever that means? Nothing but a slum lord. Surprised you are willing to put him up on a pedestal. From your posts you seem like the type who wants to operate their business the right way.
2 Reply
- Joe S.Pro Member
  Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
  1y
  Quote from @Sebastian Bennett:
  
  @Joe S. I wouldn't put @Mark Cruse and @Lucas Thomas in the same conversation of managing class d properties. Mark self managed so that he could provide a higher quality living experience for his tenants and from all accounts seemed to offer living conditions that were better than most in the class D world and treated his tenants with respect. Lucas on the other hand seeks out meth dens in war zones (his words) and treats the properties as just that. Claims to not have expenses like snow removal yet acknowledges he hires an outside PM company for his NE properties because weather shifts are too much for him to follow remotely. Makes it sound like paint is a cure-all for all repairs and somehow manages to sub meter common areas in his multi unit buildings. Claims he can only landlord his way in certain parts of the country. Apparently this makes him a landlord’s landlord whatever that means? Nothing but a slum lord. Surprised you are willing to put him up on a pedestal. From your posts you seem like the type who wants to operate their business the right way.
  
  I enjoyed hearing the perspective of LUCAS since he invested in this class property. Without his interaction and being brave enough to share his story this thread would not have went near as long. I Enjoyed hearing Stewart’s perspective as well. Stewart is a debating-pro, but that’s no surprise the man went to law school to be at Attorney . 🙂
  
  0 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Sebastian Bennett:
  
  @Joe S. I wouldn't put @Mark Cruse and @Lucas Thomas in the same conversation of managing class d properties. Mark self managed so that he could provide a higher quality living experience for his tenants and from all accounts seemed to offer living conditions that were better than most in the class D world and treated his tenants with respect. Lucas on the other hand seeks out meth dens in war zones (his words) and treats the properties as just that. Claims to not have expenses like snow removal yet acknowledges he hires an outside PM company for his NE properties because weather shifts are too much for him to follow remotely. Makes it sound like paint is a cure-all for all repairs and somehow manages to sub meter common areas in his multi unit buildings. Claims he can only landlord his way in certain parts of the country. Apparently this makes him a landlord’s landlord whatever that means? Nothing but a slum lord. Surprised you are willing to put him up on a pedestal. From your posts you seem like the type who wants to operate their business the right way.
  Well Welcome Sebastian,
  This is why us Class D landlords don't post much on these forums, its only a matter of time before someone throws the "S" word around. Which is HIGHLY Offensive.
  Just because we operate in areas you don't like, doesn't give you the right to throw around such slurs.
  That is like me saying, "All Attorneys are SCUM." ;)
  And I can only operate in certain parts of the country because the prices are currently too high all over the country. But buying real estate in any state shouldn't be taken lightly as everyone keeps glossing over the "Landlord Friendly" part of what I do.
  Landlord Friendly Means:
  1. Evictions can be done within 30 days WITH Attorneys, cheaply! No Exceptions.
  2. The Court doesn't have a philosophic conversation with you about "What is Rent?" while your trying to kick people out for non-payment. If they do, use a M2M lease so the court can't pontificate on your 30 day notice. No Exceptions.
  3. Personal Responsibility State - Tenants are responsible for their actions and aren't coddled by the government through the legal system. For example... Snow Removal! The government makes it your problem as a landlord and you can't contract the responsibility over to the tenant.
  4. BE Aggressive - Run up the judgment and sell the debt to a professionalized judgment collection company and make sure you haunt that deadbeat for the maximum allowable years. I garnished a tenant for 9 years. I got the last paycheck a few months ago. I'm proud of that one. :)
  I tell all my tenants this story because it usually helps them realize they should sign the mutual cancellation agreement and move out within the notice period.
  5. Rent Striking is ILLEGAL - Tenants can't withhold rent because they broke something and never tell me.
  This is why I gave my lovely disclaimer on my original post because I don't know the full costs of ownership in Pennsylvania and know nothing of their laws. It could very well be impossible to cashflow there and it isn't the place for me.
  2 Reply
- Alan AsriantsBusiness Member
  OP
  Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
  1y
  Quote from @Lucas Thomas:
  
  Quote from @Sebastian Bennett:
  
  @Joe S. I wouldn't put @Mark Cruse and @Lucas Thomas in the same conversation of managing class d properties. Mark self managed so that he could provide a higher quality living experience for his tenants and from all accounts seemed to offer living conditions that were better than most in the class D world and treated his tenants with respect. Lucas on the other hand seeks out meth dens in war zones (his words) and treats the properties as just that. Claims to not have expenses like snow removal yet acknowledges he hires an outside PM company for his NE properties because weather shifts are too much for him to follow remotely. Makes it sound like paint is a cure-all for all repairs and somehow manages to sub meter common areas in his multi unit buildings. Claims he can only landlord his way in certain parts of the country. Apparently this makes him a landlord’s landlord whatever that means? Nothing but a slum lord. Surprised you are willing to put him up on a pedestal. From your posts you seem like the type who wants to operate their business the right way.
  Well Welcome Sebastian,
  This is why us Class D landlords don't post much on these forums, its only a matter of time before someone throws the "S" word around. Which is HIGHLY Offensive.
  Just because we operate in areas you don't like, doesn't give you the right to throw around such slurs.
  That is like me saying, "All Attorneys are SCUM." ;)
  And I can only operate in certain parts of the country because the prices are currently too high all over the country. But buying real estate in any state shouldn't be taken lightly as everyone keeps glossing over the "Landlord Friendly" part of what I do.
  Landlord Friendly Means:
  1. Evictions can be done within 30 days WITH Attorneys, cheaply! No Exceptions.
  2. The Court doesn't have a philosophic conversation with you about "What is Rent?" while your trying to kick people out for non-payment. If they do, use a M2M lease so the court can't pontificate on your 30 day notice. No Exceptions.
  3. Personal Responsibility State - Tenants are responsible for their actions and aren't coddled by the government through the legal system. For example... Snow Removal! The government makes it your problem as a landlord and you can't contract the responsibility over to the tenant.
  4. BE Aggressive - Run up the judgment and sell the debt to a professionalized judgment collection company and make sure you haunt that deadbeat for the maximum allowable years. I garnished a tenant for 9 years. I got the last paycheck a few months ago. I'm proud of that one. :)
  I tell all my tenants this story because it usually helps them realize they should sign the mutual cancellation agreement and move out within the notice period.
  5. Rent Striking is ILLEGAL - Tenants can't withhold rent because they broke something and never tell me.
  This is why I gave my lovely disclaimer on my original post because I don't know the full costs of ownership in Pennsylvania and know nothing of their laws. It could very well be impossible to cashflow there and it isn't the place for me.
  
  Honestly, your points on what to look out for is like trying to go into a war wearing as much bullet proof armor thinking that will protect you. Sure to some degree it will, but your systems seem to be entirely based on horrible what ifs. If you bought in a decent area and had decent tenants, you wouldn't have to worry about this and over the course of 10+ years you would have accumulated a lot more wealth and your health.
  When you're finally done running a business and dealing with this issues, you should try investing in real estate and benefiting from appreciation and PASSIVE income.
  [email protected]267-767-0111
  Alan Asriants - New Century Real Estate 590 Reviews
  View Page
  1 Reply
- James Hamling
  Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
  1y
  Quote from @Alan Asriants:
  
  Quote from @Lucas Thomas:
  
  Quote from @Sebastian Bennett:
  
  @Joe S. I wouldn't put @Mark Cruse and @Lucas Thomas in the same conversation of managing class d properties. Mark self managed so that he could provide a higher quality living experience for his tenants and from all accounts seemed to offer living conditions that were better than most in the class D world and treated his tenants with respect. Lucas on the other hand seeks out meth dens in war zones (his words) and treats the properties as just that. Claims to not have expenses like snow removal yet acknowledges he hires an outside PM company for his NE properties because weather shifts are too much for him to follow remotely. Makes it sound like paint is a cure-all for all repairs and somehow manages to sub meter common areas in his multi unit buildings. Claims he can only landlord his way in certain parts of the country. Apparently this makes him a landlord’s landlord whatever that means? Nothing but a slum lord. Surprised you are willing to put him up on a pedestal. From your posts you seem like the type who wants to operate their business the right way.
  Well Welcome Sebastian,
  This is why us Class D landlords don't post much on these forums, its only a matter of time before someone throws the "S" word around. Which is HIGHLY Offensive.
  Just because we operate in areas you don't like, doesn't give you the right to throw around such slurs.
  That is like me saying, "All Attorneys are SCUM." ;)
  And I can only operate in certain parts of the country because the prices are currently too high all over the country. But buying real estate in any state shouldn't be taken lightly as everyone keeps glossing over the "Landlord Friendly" part of what I do.
  Landlord Friendly Means:
  1. Evictions can be done within 30 days WITH Attorneys, cheaply! No Exceptions.
  2. The Court doesn't have a philosophic conversation with you about "What is Rent?" while your trying to kick people out for non-payment. If they do, use a M2M lease so the court can't pontificate on your 30 day notice. No Exceptions.
  3. Personal Responsibility State - Tenants are responsible for their actions and aren't coddled by the government through the legal system. For example... Snow Removal! The government makes it your problem as a landlord and you can't contract the responsibility over to the tenant.
  4. BE Aggressive - Run up the judgment and sell the debt to a professionalized judgment collection company and make sure you haunt that deadbeat for the maximum allowable years. I garnished a tenant for 9 years. I got the last paycheck a few months ago. I'm proud of that one. :)
  I tell all my tenants this story because it usually helps them realize they should sign the mutual cancellation agreement and move out within the notice period.
  5. Rent Striking is ILLEGAL - Tenants can't withhold rent because they broke something and never tell me.
  This is why I gave my lovely disclaimer on my original post because I don't know the full costs of ownership in Pennsylvania and know nothing of their laws. It could very well be impossible to cashflow there and it isn't the place for me.
  
  Honestly, your points on what to look out for is like trying to go into a war wearing as much bullet proof armor thinking that will protect you. Sure to some degree it will, but your systems seem to be entirely based on horrible what ifs. If you bought in a decent area and had decent tenants, you wouldn't have to worry about this and over the course of 10+ years you would have accumulated a lot more wealth and your health.
  When you're finally done running a business and dealing with this issues, you should try investing in real estate and benefiting from appreciation and PASSIVE income.
  
  Appreciation and asset value is a very BIG item often overlooked in analysis of things.
  Having done hundreds upon hundreds of sec8 properties, I have consistently seen, over time, that asset value is almost exclusively pegged to revenue production and current market value for said revenue.
  Meaning, market get's "hot" and properties are appreciating 20%+...... Not the sec8 units unless we are clearing them to sell retail. And even then it's often "nerf'd" because of the placement the vast majority of sec8 units are in.
  It's rent's going up that = asset appreciation.
  And with sec8, it's waiting on a government body to choose to raise the rents, and by how much they assign that elevated rent.
  VS my class-A/B market rentals.
  These are almost exclusively located in home owner heavy areas. Meaning retailing is a natural liquidation model, and capturing full market appreciation rather simple.
  Also market rent's peg strongly too market median property sale prices. Setting stage for rent value appreciation connected to BOTH asset appreciation AND supply/demand factor's for rental availabilities.
  I could get down the rabbit hole of the economics and metrics of it all but short-short version is we see a LOT more in every appreciation metric too class A/B vs sec8.
  1 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Alan Asriants:
  
  Quote from @Lucas Thomas:
  
  Quote from @Sebastian Bennett:
  
  @Joe S. I wouldn't put @Mark Cruse and @Lucas Thomas in the same conversation of managing class d properties. Mark self managed so that he could provide a higher quality living experience for his tenants and from all accounts seemed to offer living conditions that were better than most in the class D world and treated his tenants with respect. Lucas on the other hand seeks out meth dens in war zones (his words) and treats the properties as just that. Claims to not have expenses like snow removal yet acknowledges he hires an outside PM company for his NE properties because weather shifts are too much for him to follow remotely. Makes it sound like paint is a cure-all for all repairs and somehow manages to sub meter common areas in his multi unit buildings. Claims he can only landlord his way in certain parts of the country.  Apparently this makes him a landlord’s landlord whatever that means? Nothing but a slum lord. Surprised you are willing to put him up on a pedestal. From your posts you seem like the type who wants to operate their business the right way.
  Well Welcome Sebastian,
  This is why us Class D landlords don't post much on these forums, its only a matter of time before someone throws the "S" word around. Which is HIGHLY Offensive.
  Just because we operate in areas you don't like, doesn't give you the right to throw around such slurs.
  That is like me saying, "All Attorneys are SCUM." ;)
  And I can only operate in certain parts of the country because the prices are currently too high all over the country. But buying real estate in any state shouldn't be taken lightly as everyone keeps glossing over the "Landlord Friendly" part of what I do.
  Landlord Friendly Means:
  1. Evictions can be done within 30 days WITH Attorneys, cheaply! No Exceptions.
  2. The Court doesn't have a philosophic conversation with you about "What is Rent?" while your trying to kick people out for non-payment. If they do, use a M2M lease so the court can't pontificate on your 30 day notice. No Exceptions.
  3. Personal Responsibility State - Tenants are responsible for their actions and aren't coddled by the government through the legal system. For example... Snow Removal! The government makes it your problem as a landlord and you can't contract the responsibility over to the tenant.
  4. BE Aggressive - Run up the judgment and sell the debt to a professionalized judgment collection company and make sure you haunt that deadbeat for the maximum allowable years. I garnished a tenant for 9 years. I got the last paycheck a few months ago. I'm proud of that one. :)
  I tell all my tenants this story because it usually helps them realize they should sign the mutual cancellation agreement and move out within the notice period.
  5. Rent Striking is ILLEGAL - Tenants can't withhold rent because they broke something and never tell me.
  This is why I gave my lovely disclaimer on my original post because I don't know the full costs of ownership in Pennsylvania and know nothing of their laws. It could very well be impossible to cashflow there and it isn't the place for me.
  
  Honestly, your points on what to look out for is like trying to go into a war wearing as much bullet proof armor thinking that will protect you. Sure to some degree it will, but your systems seem to be entirely based on horrible what ifs. If you bought in a decent area and had decent tenants, you wouldn't have to worry about this and over the course of 10+ years you would have accumulated a lot more wealth and your health.
  When you're finally done running a business and dealing with this issues, you should try investing in real estate and benefiting from appreciation and PASSIVE income.
  
  I'm come to the realization that this thread is full of people who aren't actually "landlords" just a bunch of "Appreciation Queens" selling "Perfect" "Negative-Cashflow  Properties" with "Angel" Tenants on the pipe dream of Appreciation.
  
  Let's ask how that worked out for the 2008 crowd.
  
  As "D" properties are passive, you just can't be squeamish about it, which apparently a lot of you are or too lazy to create the landlord systems to keep tenants in check.
  
  AS:
  
  + People run everything for me and I barely have to get involved.
  
  + I live well off that income and go on vacations once a month or more.
  
  + All the tenants pay and are "Lifers" as they have no where else to go. (Turnovers are near non-existent)
  
  + If they get out of line, you seem to understand what happens to them.
  
  It's just not for "Fake" Landlords who purport "perfect" properties and "Angel" tenants.
  
  You follow your Pied Piper of Appreciation and deals the 99% of us don't have access to.
  
  3 Reply
- Alan AsriantsBusiness Member
  OP
  Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
  1y
  Quote from @Lucas Thomas:
  
  Quote from @Alan Asriants:
  
  Quote from @Lucas Thomas:
  
  Quote from @Sebastian Bennett:
  
  @Joe S. I wouldn't put @Mark Cruse and @Lucas Thomas in the same conversation of managing class d properties. Mark self managed so that he could provide a higher quality living experience for his tenants and from all accounts seemed to offer living conditions that were better than most in the class D world and treated his tenants with respect. Lucas on the other hand seeks out meth dens in war zones (his words) and treats the properties as just that. Claims to not have expenses like snow removal yet acknowledges he hires an outside PM company for his NE properties because weather shifts are too much for him to follow remotely. Makes it sound like paint is a cure-all for all repairs and somehow manages to sub meter common areas in his multi unit buildings. Claims he can only landlord his way in certain parts of the country.  Apparently this makes him a landlord’s landlord whatever that means? Nothing but a slum lord. Surprised you are willing to put him up on a pedestal. From your posts you seem like the type who wants to operate their business the right way.
  Well Welcome Sebastian,
  This is why us Class D landlords don't post much on these forums, its only a matter of time before someone throws the "S" word around. Which is HIGHLY Offensive.
  Just because we operate in areas you don't like, doesn't give you the right to throw around such slurs.
  That is like me saying, "All Attorneys are SCUM." ;)
  And I can only operate in certain parts of the country because the prices are currently too high all over the country. But buying real estate in any state shouldn't be taken lightly as everyone keeps glossing over the "Landlord Friendly" part of what I do.
  Landlord Friendly Means:
  1. Evictions can be done within 30 days WITH Attorneys, cheaply! No Exceptions.
  2. The Court doesn't have a philosophic conversation with you about "What is Rent?" while your trying to kick people out for non-payment. If they do, use a M2M lease so the court can't pontificate on your 30 day notice. No Exceptions.
  3. Personal Responsibility State - Tenants are responsible for their actions and aren't coddled by the government through the legal system. For example... Snow Removal! The government makes it your problem as a landlord and you can't contract the responsibility over to the tenant.
  4. BE Aggressive - Run up the judgment and sell the debt to a professionalized judgment collection company and make sure you haunt that deadbeat for the maximum allowable years. I garnished a tenant for 9 years. I got the last paycheck a few months ago. I'm proud of that one. :)
  I tell all my tenants this story because it usually helps them realize they should sign the mutual cancellation agreement and move out within the notice period.
  5. Rent Striking is ILLEGAL - Tenants can't withhold rent because they broke something and never tell me.
  This is why I gave my lovely disclaimer on my original post because I don't know the full costs of ownership in Pennsylvania and know nothing of their laws. It could very well be impossible to cashflow there and it isn't the place for me.
  
  Honestly, your points on what to look out for is like trying to go into a war wearing as much bullet proof armor thinking that will protect you. Sure to some degree it will, but your systems seem to be entirely based on horrible what ifs. If you bought in a decent area and had decent tenants, you wouldn't have to worry about this and over the course of 10+ years you would have accumulated a lot more wealth and your health.
  When you're finally done running a business and dealing with this issues, you should try investing in real estate and benefiting from appreciation and PASSIVE income.
  
  I'm come to the realization that this thread is full of people who aren't actually "landlords" just a bunch of "Appreciation Queens" selling "Perfect" "Negative-Cashflow  Properties" with "Angel" Tenants on the pipe dream of Appreciation.
  
  Let's ask how that worked out for the 2008 crowd.
  
  As "D" properties are passive, you just can't be squeamish about it, which apparently a lot of you are or too lazy to create the landlord systems to keep tenants in check.
  
  AS:
  
  + People run everything for me and I barely have to get involved.
  
  + I live well off that income and go on vacations once a month or more.
  
  + All the tenants pay and are "Lifers" as they have no where else to go. (Turnovers are near non-existent)
  
  + If they get out of line, you seem to understand what happens to them.
  
  It's just not for "Fake" Landlords who purport "perfect" properties and "Angel" tenants.
  
  You follow your Pied Piper of Appreciation and deals the 99% of us don't have access to.
  
  If you bought at the peak of 2008 and held on today in an A class area, you would be really happy you did so...
  [email protected]267-767-0111
  Alan Asriants - New Century Real Estate 590 Reviews
  View Page
  0 Reply
Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
@Robert Ellis There are certainly benefits to new construction (if built by reputable builder). No deferred maintenance, cap ex greatly reduced, many municipalities offer tax abatements or other incentives etc. However, I am not opposed by any means to buying existing structures but location matters. With current construction debt pricing and construction costs I am finding some rehabs are penciling better. Only the high end new construction $400/sf+ for sale or higher end rentals are really penciling well in my market, Philadelphia at this time if ground up dev is pursued.

In both heavy rehabs and light or cosmetic rehabs you can do quite well acquiring real estate significantly below replacement costs. You can do well even if the buildings have systems that possess some useful life and don't require phsyical rehabilitation but I will say it again, the key is location and market fundamenals. If you purchase in better neighborhoods, its easier to absorb the costs of making repairs the correct way. You can hire the licensed and insured contractors. you can make true cap ex investments such as new roofs, replace whole systems etc. It's very difficult to do so in the lower priced properties and this is why you often see duct tape repairs, or investors hiring the lowest cost labor believing they are now owners of "gut rehabs" with new systems only to find out installs were done incorrectly, shortcuts were taken and the repairs never stop from there.

This is why the cash flow may appear stronger on a spread sheet, but the cap ex and operational expenses eventually catch up unless the investor is extremely hands on. In that price point you are really operating a business more than you are a real estate investor. The exception are those individuals who understand and identify the market fundamentals that suggest significant appreciation but most who buy in these lower price points are chasing cash flow, have no sense of market fundamentals and buy property in stagnant market with no real investment thesis.
[email protected]
2 Reply
- Lu Kang
  Investor · Lafayette Hill, PA · Member since 2015 · 27 posts · 27 votes
  1y
  Quote from @Stuart Udis:
  
  @Robert Ellis There are certainly benefits to new construction (if built by reputable builder). No deferred maintenance, cap ex greatly reduced, many municipalities offer tax abatements or other incentives etc. However, I am not opposed by any means to buying existing structures but location matters. With current construction debt pricing and construction costs I am finding some rehabs are penciling better. Only the high end new construction $400/sf+ for sale or higher end rentals are really penciling well in my market, Philadelphia at this time if ground up dev is pursued.
  
  In both heavy rehabs and light or cosmetic rehabs you can do quite well acquiring real estate significantly below replacement costs. You can do well even if the buildings have systems that possess some useful life and don't require phsyical rehabilitation but I will say it again, the key is location and market fundamenals. If you purchase in better neighborhoods, its easier to absorb the costs of making repairs the correct way. You can hire the licensed and insured contractors. you can make true cap ex investments such as new roofs, replace whole systems etc. It's very difficult to do so in the lower priced properties and this is why you often see duct tape repairs, or investors hiring the lowest cost labor believing they are now owners of "gut rehabs" with new systems only to find out installs were done incorrectly, shortcuts were taken and the repairs never stop from there.
  
  This is why the cash flow may appear stronger on a spread sheet, but the cap ex and operational expenses eventually catch up unless the investor is extremely hands on. In that price point you are really operating a business more than you are a real estate investor. The exception are those individuals who understand and identify the market fundamentals that suggest significant appreciation but most who buy in these lower price points are chasing cash flow, have no sense of market fundamentals and buy property in stagnant market with no real investment thesis.
  
  I was certainly guilty of this for a few properties. Focused on the allure of cash flow, without looking for good bones of a property. Duct Tape repairs may make you money upfront, but that luck runs out .
  Cosmetically using cheaper materials based on the class of property is one thing, but the bigger repairs ie. roofing , plumbing, electric, hvac, All the bigger updates as Stuart mentioned, cost the same. I feel from 2012 to 2020, you could get away with shortcuts, since loans were around 4% and housing prices allowed closer to meeting the 1% rule.
  
  Now that we have the data, it's important to have the systems in place and focus more on the value add.
  1 Reply
Sebastian Bennett
Investor · Bucks County · Member since 2023 · 196 posts · 156 votes
1y
@Joe S. I will agree with you, getting multiple perspectives leads to better forums. More thoughts are shared which is such good free knowledge. I will admit I read rich dad poor dad, was about ready to sign up for a coaching program that guaranteed me a section 8 house and was about ready to dive in until I began reading these forums. Now I made a modest passive investment really intended to give me a look under the hood of another investors operations and I am now saving up for another year to buy an investment property I hope to own for a very long time.
3 Reply
Todd Dexheimer
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
1y
I don't really think the issue is Section 8 vs Market rate. They are both different niches that require different skill sets. You can lose money or make money with either strategy. The real issue to me is that SF rentals just don't make much money and typically lose money. I used to own a hundred 1-4 family rentals and still own 23. I bought these for cheap 2008-2014 prices and have them leveraged at between 15-40% LTV. I cash flow each year, but not by much.
Here is the reality: on paper, they look good, but the reality of the new roof, furnace, water heater, appliances, flooring, sewer line, etc come to fruition and eat that cash flow up for the next 5 years.
You can get lucky with a few of them. I have some homes that have made me $10k+/year for 10 years, but others that lose big money each year.
Now, as I compare neighborhood class, I have to side on the A class and B class side of the coin. Better neighborhoods appreciate faster than bad neighborhoods. Buying in the best neighborhood possible, to still cash flow (on paper at least), will create the most wealth possible.
2 Reply
Caitlin Cartwright
Rental Property Investor · Palm Springs, CA · Member since 2023 · 20 posts · 9 votes
1y
Because people?
Just a hunch, haven’t read the post yet.
1 Reply
Nicholas MischPro Member
Investor · Broadview Hts, OH · Member since 2016 · 310 posts · 280 votes
1y
Thank you for this post! We have been considering section 8 investing here in Cleveland for quite a while because we hear about the "guaranteed payments" but we knew more people who lost a lot and had so many headaches on top of it. I am not saying this isn't a good strategy for some (very few), but for me it's a hard NO.
1 Reply
- Alan AsriantsBusiness Member
  OP
  Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
  1y
  Quote from @Nicholas Misch:
  
  Thank you for this post! We have been considering section 8 investing here in Cleveland for quite a while because we hear about the "guaranteed payments" but we knew more people who lost a lot and had so many headaches on top of it. I am not saying this isn't a good strategy for some (very few), but for me it's a hard NO.
  
  Love hearing the Guaranteed payment pitch too. Except they forget to mention that only the gov portion is guaranteed. And many times the tenant can have a higher portion
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Hersh ShahBusiness Member
Realtor · Atlanta, GA · Member since 2016 · 117 posts · 78 votes
1y
100% accurate. Folks often don't consider that just because it can be rented to housing authority, doesn't mean that it will be leased like hot cakes. It may take months which further brings down your NOI each time you have a turn.
Better quality properties in better neighborhoods is how wealth is made over time as those will always appreciate as long as the market overall has.
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2 Reply
Hans Waisfeld
Real Estate Agent · Miami, South Florida · Member since 2023 · 62 posts · 30 votes
1y
what a great post! thanks so much for the information and your point of view on lower class rentals. Makes perfect sense! This will help me alot
1 Reply
Matt Greer
Real Estate Agent · Mesa, AZ · Member since 2017 · 230 posts · 169 votes
1y
I agree. Section 8 can be profitable, but it takes a good property manager and an investor who knows what they're doing or you can lose so much money.
As a real estate agent I have so many people come to me who bought a course all excited to get rich quick only for reality to hit them like a freight train.
2 Reply
Lucas Thomas
Member since 2023 · 111 posts · 70 votes
1y
Well alright fellas,

This will be my last post for this thread as I got a non-landlord business to run (I don't landlord for a living) which allows me to buy more "S" word properties that make "No Money" and "Eat up all my time".

Poor me.

But I'm glad I learned the following lessons from our time together:

+ "Build your OWN A+ Properties, Dummy".

+ Overpay for B+ properties that make negative cash flow... And get rich... I think.. Somewhere in there?

+ Buy Blackstone (who does the same "bad strategies" I do cause they are REAL Landlords) cause real estate is too hard.

+ Be Best Friends with your tenants cause they WANT to pay rent. Go figure

+ Rent to the perfect TENANT and NEVER have problems... EVER.

Well I'm glad I know now.

Thank you BP.

1 Reply
- JJ P.
  Real Estate Agent · San DIego · Member since 2019 · 177 posts · 185 votes
  1y
  Quote from @Lucas Thomas:
  
  Well alright fellas,
  
  This will be my last post for this thread as I got a non-landlord business to run (I don't landlord for a living) which allows me to buy more "S" word properties that make "No Money" and "Eat up all my time".
  
  Poor me.
  
  But I'm glad I learned the following lessons from our time together:
  
  + "Build your OWN A+ Properties, Dummy".
  
  + Overpay for B+ properties that make negative cash flow... And get rich... I think.. Somewhere in there?
  
  + Buy Blackstone (who does the same "bad strategies" I do cause they are REAL Landlords) cause real estate is too hard.
  
  + Be Best Friends with your tenants cause they WANT to pay rent. Go figure
  
  + Rent to the perfect TENANT and NEVER have problems... EVER.
  
  Well I'm glad I know now.
  
  Thank you BP.
  
  I actually had to crack up over this. Kudos to you for wading in. Honestly, I appreciate it because your input made me clarify what exactly my business model is. And how different yours is. Thanks! You brought up plenty of points that are worth noting
  It’s worth mentioning that people with enough money to invest in real estate may never have spent a moment in a Class D or F neighborhood So they don’t understand what they’re taking on Even more so if the whole thing was orchestrated by a $15,000 seminar on how to do it These poor blokes are blindsided when things go south
  Most of my friends don’t invest in real estate because of the classic argument that “the water heater might break in the middle of the night.” Like myself, they simply don’t have the skill set or desire to tackle what you’ve done
  Quite frankly, you’re providing needed housing for the bottom rung, and you’ve figured out exactly what works. That learning curve scares me! The bottom line for me is that I like self management, (haven’t had great luck with management companies) and the less calls from the tenants, the better.
  I definitely appreciate your input, and hope you stick around
  
  3 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @JJ P.:
  
  Quote from @Lucas Thomas:
  
  Well alright fellas,
  
  This will be my last post for this thread as I got a non-landlord business to run (I don't landlord for a living) which allows me to buy more "S" word properties that make "No Money" and "Eat up all my time".
  
  Poor me.
  
  But I'm glad I learned the following lessons from our time together:
  
  + "Build your OWN A+ Properties, Dummy".
  
  + Overpay for B+ properties that make negative cash flow... And get rich... I think.. Somewhere in there?
  
  + Buy Blackstone (who does the same "bad strategies" I do cause they are REAL Landlords) cause real estate is too hard.
  
  + Be Best Friends with your tenants cause they WANT to pay rent. Go figure
  
  + Rent to the perfect TENANT and NEVER have problems... EVER.
  
  Well I'm glad I know now.
  
  Thank you BP.
  
  I actually had to crack up over this. Kudos to you for wading in. Honestly, I appreciate it because your input made me clarify what exactly my business model is. And how different yours is. Thanks! You brought up plenty of points that are worth noting
  It’s worth mentioning that people with enough money to invest in real estate may never have spent a moment in a Class D or F neighborhood So they don’t understand what they’re taking on Even more so if the whole thing was orchestrated by a $15,000 seminar on how to do it These poor blokes are blindsided when things go south
  Most of my friends don’t invest in real estate because of the classic argument that “the water heater might break in the middle of the night.” Like myself, they simply don’t have the skill set or desire to tackle what you’ve done
  Quite frankly, you’re providing needed housing for the bottom rung, and you’ve figured out exactly what works. That learning curve scares me! The bottom line for me is that I like self management, (haven’t had great luck with management companies) and the less calls from the tenants, the better.
  I definitely appreciate your input, and hope you stick around
  
  Well thank you!
  
  I found that humor makes the ugly world go round.
  
  And I've made many of my clients and friends wealthy off Class D.
  
  IF you or anyone wants to bypass that learning curve. Let me know.
  
  Cause I'm like a vulture for the people who come into Class D with the wrong mindset. Who do you think I got all my properties from? MU-hahahaha
  
  (:
  1 Reply
Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.

An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.

Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
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- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  0 Reply
- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  1y
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
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  2 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D. So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  0 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Lucas Thomas:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D. So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  
  Thought Experiment:
  Hey Guys!
  You should never ever ever do a development deal. I bought over 300 land deals over the years. Probably overpaid for it. Overran my budget. And barely broke even cause the contractors are too intense. Id rather just buy Blackstone cause real estate is too hard.
  0 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Lucas Thomas:
  
  Quote from @Lucas Thomas:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D.  So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  
  Thought Experiment:
  Hey Guys!
  You should never ever ever do a development deal. I bought over 300 land deals over the years. Probably overpaid for it. Overran my budget. And barely broke even cause the contractors are too intense. Id rather just buy Blackstone cause real estate is too hard.
  
  listen to me.   I'm an expert
  0 Reply
- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  1y
  Quote from @Lucas Thomas:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D. So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  
  I am not talking trash about D class heck I make a great living funding those that are in the D class buy hold model.. Many of my clients own 200 or more doors and I help them buy more each and every week in cities like Baltimore and Cleveland and KC Toledo St. Lu Bham etc etc.. The point of this thread though is its not for everyone and certainly very risky for folks that are not local and cant scale.. In fact I personally will not loan to anyone who is not local. I will consider those that have a local partner though.. I have clients like CA based tech folks that partner with a local and are building larger portfolios.. But one off no way..
  
  As to the information on your Wall . A lot of Folks on BP look at those not to dissect or criticizes but to sum up the veracity of the person giving advice on BP.. So no way to really know what you have or dont have etc etc.. I will let others also have thier own conclusion about that.. If you make D class work for you.. Good for you.. Its sorely needed.. I know in Baltimore for instance I am super proud of what I do there in the D class area with my two clients that each own well over 200 row houses as I stated.. I funding a 23 home package for one next week.. they are all shells al blighted on one block each will take at least 100k for the full gut rehab.. so there we are pumping 2.5 million in cash into the hood.. that is something that my client can be proud of and I am proud to be his capital partner..
  
  then on the flip side you go to my 90 home new build Project in Oregon 750 to 1 mil each that I own and have been selling to owner occ and a lot of those folks are paying cash U know empty nesters down sizing to very nice Single levels.. So its pretty wild fund a home that can be bought for 10k then build 750k plus and we do some 2 mil plus builds in charleston SC. Kind of all over the map.. But I still go back to my roots at D class C class funding..
  
  And just because I dont care to own them like I said I had 300 at one time.. does not mean its bad for others to own that class.. The exception is the out of area going to buy one or two.. those folks I think take on more risk than they realize and would generally be better buying in a better neighborhood and asset class..
  Podcast Guest on Show #222
  JLH Capital Partners51 Review
  Website View Page
  2 Reply
- Eric James
  Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
  1y
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D. So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  
  I am not talking trash about D class heck I make a great living funding those that are in the D class buy hold model.. Many of my clients own 200 or more doors and I help them buy more each and every week in cities like Baltimore and Cleveland and KC Toledo St. Lu Bham etc etc.. The point of this thread though is its not for everyone and certainly very risky for folks that are not local and cant scale.. In fact I personally will not loan to anyone who is not local. I will consider those that have a local partner though.. I have clients like CA based tech folks that partner with a local and are building larger portfolios.. But one off no way..
  
  As to the information on your Wall . A lot of Folks on BP look at those not to dissect or criticizes but to sum up the veracity of the person giving advice on BP.. So no way to really know what you have or dont have etc etc.. I will let others also have thier own conclusion about that.. If you make D class work for you.. Good for you.. Its sorely needed.. I know in Baltimore for instance I am super proud of what I do there in the D class area with my two clients that each own well over 200 row houses as I stated.. I funding a 23 home package for one next week.. they are all shells al blighted on one block each will take at least 100k for the full gut rehab.. so there we are pumping 2.5 million in cash into the hood.. that is something that my client can be proud of and I am proud to be his capital partner..
  
  then on the flip side you go to my 90 home new build Project in Oregon 750 to 1 mil each that I own and have been selling to owner occ and a lot of those folks are paying cash U know empty nesters down sizing to very nice Single levels.. So its pretty wild fund a home that can be bought for 10k then build 750k plus and we do some 2 mil plus builds in charleston SC. Kind of all over the map.. But I still go back to my roots at D class C class funding..
  
  And just because I dont care to own them like I said I had 300 at one time.. does not mean its bad for others to own that class.. The exception is the out of area going to buy one or two.. those folks I think take on more risk than they realize and would generally be better buying in a better neighborhood and asset class..
  
  Jay....your partners in the blighted areas, after they rehab those houses are there comps for them to appraise and refi out their cash? Seems like it could be difficult to get a place to appraise over $100k in bad areas
  1 Reply
- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  1y
  Quote from @Eric James:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D. So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  
  I am not talking trash about D class heck I make a great living funding those that are in the D class buy hold model.. Many of my clients own 200 or more doors and I help them buy more each and every week in cities like Baltimore and Cleveland and KC Toledo St. Lu Bham etc etc.. The point of this thread though is its not for everyone and certainly very risky for folks that are not local and cant scale.. In fact I personally will not loan to anyone who is not local. I will consider those that have a local partner though.. I have clients like CA based tech folks that partner with a local and are building larger portfolios.. But one off no way..
  
  As to the information on your Wall . A lot of Folks on BP look at those not to dissect or criticizes but to sum up the veracity of the person giving advice on BP.. So no way to really know what you have or dont have etc etc.. I will let others also have thier own conclusion about that.. If you make D class work for you.. Good for you.. Its sorely needed.. I know in Baltimore for instance I am super proud of what I do there in the D class area with my two clients that each own well over 200 row houses as I stated.. I funding a 23 home package for one next week.. they are all shells al blighted on one block each will take at least 100k for the full gut rehab.. so there we are pumping 2.5 million in cash into the hood.. that is something that my client can be proud of and I am proud to be his capital partner..
  
  then on the flip side you go to my 90 home new build Project in Oregon 750 to 1 mil each that I own and have been selling to owner occ and a lot of those folks are paying cash U know empty nesters down sizing to very nice Single levels.. So its pretty wild fund a home that can be bought for 10k then build 750k plus and we do some 2 mil plus builds in charleston SC. Kind of all over the map.. But I still go back to my roots at D class C class funding..
  
  And just because I dont care to own them like I said I had 300 at one time.. does not mean its bad for others to own that class.. The exception is the out of area going to buy one or two.. those folks I think take on more risk than they realize and would generally be better buying in a better neighborhood and asset class..
  
  Jay....your partners in the blighted areas, after they rehab those houses are there comps for them to appraise and refi out their cash? Seems like it could be difficult to get a place to appraise over $100k in bad areas
  
  Actually No they get appraisals in the 200 to 275k range .. and refi out and have no cash into them once i am paid keep in mind I fund these guys 100% so they have no cash in them up front and I get all the refi proceeds.. There is another guy I fund there he grew up there is a local and he is retailing his homes.. I saw one on a recent TV fix and flip show.. A local resident who is in pro B ball came back and bought one.. And if you use that show this is the quality of rehab that my clients are doing.. its really C to B class rehabs all ststems new. one thing about the Row houses u have small roof and only the front and back to worry about compared to a 4 sided property.. so most of the 100k goes into full gut rehab.. new kitchens bathrooms stainless appliances etc.. So the renters love them and sec 8 in that area is 1700 to 2400 a month. So they do cash flow with zero money out of pocket.. Again since I am giving them 100% financing the refi just pays me and they are off and running..
  
  Bottom line there are enough retail sales to establish the comps..
  Podcast Guest on Show #222
  JLH Capital Partners51 Review
  Website View Page
  1 Reply
- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  1y
  Quote from @Eric James:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D. So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  
  I am not talking trash about D class heck I make a great living funding those that are in the D class buy hold model.. Many of my clients own 200 or more doors and I help them buy more each and every week in cities like Baltimore and Cleveland and KC Toledo St. Lu Bham etc etc.. The point of this thread though is its not for everyone and certainly very risky for folks that are not local and cant scale.. In fact I personally will not loan to anyone who is not local. I will consider those that have a local partner though.. I have clients like CA based tech folks that partner with a local and are building larger portfolios.. But one off no way..
  
  As to the information on your Wall . A lot of Folks on BP look at those not to dissect or criticizes but to sum up the veracity of the person giving advice on BP.. So no way to really know what you have or dont have etc etc.. I will let others also have thier own conclusion about that.. If you make D class work for you.. Good for you.. Its sorely needed.. I know in Baltimore for instance I am super proud of what I do there in the D class area with my two clients that each own well over 200 row houses as I stated.. I funding a 23 home package for one next week.. they are all shells al blighted on one block each will take at least 100k for the full gut rehab.. so there we are pumping 2.5 million in cash into the hood.. that is something that my client can be proud of and I am proud to be his capital partner..
  
  then on the flip side you go to my 90 home new build Project in Oregon 750 to 1 mil each that I own and have been selling to owner occ and a lot of those folks are paying cash U know empty nesters down sizing to very nice Single levels.. So its pretty wild fund a home that can be bought for 10k then build 750k plus and we do some 2 mil plus builds in charleston SC. Kind of all over the map.. But I still go back to my roots at D class C class funding..
  
  And just because I dont care to own them like I said I had 300 at one time.. does not mean its bad for others to own that class.. The exception is the out of area going to buy one or two.. those folks I think take on more risk than they realize and would generally be better buying in a better neighborhood and asset class..
  
  Jay....your partners in the blighted areas, after they rehab those houses are there comps for them to appraise and refi out their cash? Seems like it could be difficult to get a place to appraise over $100k in bad areas
  
  If you want I can shoot you a few address's so you can check them out.. let me know and I will pm them to you.. like I said pretty cool what we are doing there in Balt city.
  Podcast Guest on Show #222
  JLH Capital Partners51 Review
  Website View Page
  0 Reply
- Eric James
  Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
  1y
  Quote from @Jay Hinrichs:
  
  Quote from @Eric James:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D. So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  
  I am not talking trash about D class heck I make a great living funding those that are in the D class buy hold model.. Many of my clients own 200 or more doors and I help them buy more each and every week in cities like Baltimore and Cleveland and KC Toledo St. Lu Bham etc etc.. The point of this thread though is its not for everyone and certainly very risky for folks that are not local and cant scale.. In fact I personally will not loan to anyone who is not local. I will consider those that have a local partner though.. I have clients like CA based tech folks that partner with a local and are building larger portfolios.. But one off no way..
  
  As to the information on your Wall . A lot of Folks on BP look at those not to dissect or criticizes but to sum up the veracity of the person giving advice on BP.. So no way to really know what you have or dont have etc etc.. I will let others also have thier own conclusion about that.. If you make D class work for you.. Good for you.. Its sorely needed.. I know in Baltimore for instance I am super proud of what I do there in the D class area with my two clients that each own well over 200 row houses as I stated.. I funding a 23 home package for one next week.. they are all shells al blighted on one block each will take at least 100k for the full gut rehab.. so there we are pumping 2.5 million in cash into the hood.. that is something that my client can be proud of and I am proud to be his capital partner..
  
  then on the flip side you go to my 90 home new build Project in Oregon 750 to 1 mil each that I own and have been selling to owner occ and a lot of those folks are paying cash U know empty nesters down sizing to very nice Single levels.. So its pretty wild fund a home that can be bought for 10k then build 750k plus and we do some 2 mil plus builds in charleston SC. Kind of all over the map.. But I still go back to my roots at D class C class funding..
  
  And just because I dont care to own them like I said I had 300 at one time.. does not mean its bad for others to own that class.. The exception is the out of area going to buy one or two.. those folks I think take on more risk than they realize and would generally be better buying in a better neighborhood and asset class..
  
  Jay....your partners in the blighted areas, after they rehab those houses are there comps for them to appraise and refi out their cash? Seems like it could be difficult to get a place to appraise over $100k in bad areas
  
  Actually No they get appraisals in the 200 to 275k range .. and refi out and have no cash into them once i am paid keep in mind I fund these guys 100% so they have no cash in them up front and I get all the refi proceeds.. There is another guy I fund there he grew up there is a local and he is retailing his homes.. I saw one on a recent TV fix and flip show.. A local resident who is in pro B ball came back and bought one.. And if you use that show this is the quality of rehab that my clients are doing.. its really C to B class rehabs all ststems new. one thing about the Row houses u have small roof and only the front and back to worry about compared to a 4 sided property.. so most of the 100k goes into full gut rehab.. new kitchens bathrooms stainless appliances etc.. So the renters love them and sec 8 in that area is 1700 to 2400 a month. So they do cash flow with zero money out of pocket.. Again since I am giving them 100% financing the refi just pays me and they are off and running..
  
  Bottom line there are enough retail sales to establish the comps..
  
  Wow, that's quite an area. Class D area with homes over $200k market value and section 8 paying $2000 rents. You're a one man gentrification machine. :)
  2 Reply
- Jay HinrichsBusiness Member
  Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
  1y
  Quote from @Eric James:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Eric James:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D. So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  
  I am not talking trash about D class heck I make a great living funding those that are in the D class buy hold model.. Many of my clients own 200 or more doors and I help them buy more each and every week in cities like Baltimore and Cleveland and KC Toledo St. Lu Bham etc etc.. The point of this thread though is its not for everyone and certainly very risky for folks that are not local and cant scale.. In fact I personally will not loan to anyone who is not local. I will consider those that have a local partner though.. I have clients like CA based tech folks that partner with a local and are building larger portfolios.. But one off no way..
  
  As to the information on your Wall . A lot of Folks on BP look at those not to dissect or criticizes but to sum up the veracity of the person giving advice on BP.. So no way to really know what you have or dont have etc etc.. I will let others also have thier own conclusion about that.. If you make D class work for you.. Good for you.. Its sorely needed.. I know in Baltimore for instance I am super proud of what I do there in the D class area with my two clients that each own well over 200 row houses as I stated.. I funding a 23 home package for one next week.. they are all shells al blighted on one block each will take at least 100k for the full gut rehab.. so there we are pumping 2.5 million in cash into the hood.. that is something that my client can be proud of and I am proud to be his capital partner..
  
  then on the flip side you go to my 90 home new build Project in Oregon 750 to 1 mil each that I own and have been selling to owner occ and a lot of those folks are paying cash U know empty nesters down sizing to very nice Single levels.. So its pretty wild fund a home that can be bought for 10k then build 750k plus and we do some 2 mil plus builds in charleston SC. Kind of all over the map.. But I still go back to my roots at D class C class funding..
  
  And just because I dont care to own them like I said I had 300 at one time.. does not mean its bad for others to own that class.. The exception is the out of area going to buy one or two.. those folks I think take on more risk than they realize and would generally be better buying in a better neighborhood and asset class..
  
  Jay....your partners in the blighted areas, after they rehab those houses are there comps for them to appraise and refi out their cash? Seems like it could be difficult to get a place to appraise over $100k in bad areas
  
  Actually No they get appraisals in the 200 to 275k range .. and refi out and have no cash into them once i am paid keep in mind I fund these guys 100% so they have no cash in them up front and I get all the refi proceeds.. There is another guy I fund there he grew up there is a local and he is retailing his homes.. I saw one on a recent TV fix and flip show.. A local resident who is in pro B ball came back and bought one.. And if you use that show this is the quality of rehab that my clients are doing.. its really C to B class rehabs all ststems new. one thing about the Row houses u have small roof and only the front and back to worry about compared to a 4 sided property.. so most of the 100k goes into full gut rehab.. new kitchens bathrooms stainless appliances etc.. So the renters love them and sec 8 in that area is 1700 to 2400 a month. So they do cash flow with zero money out of pocket.. Again since I am giving them 100% financing the refi just pays me and they are off and running..
  
  Bottom line there are enough retail sales to establish the comps..
  
  Wow, that's quite an area. Class D area with homes over $200k market value and section 8 paying $2000 rents. You're a one man gentrification machine. :)
  
  its not me its my clients.. I am just providing the Money to make it happen they do all the heavy lifting and have the crews ( and that is the key to working in those areas)..
  Podcast Guest on Show #222
  JLH Capital Partners51 Review
  Website View Page
  0 Reply
- Lucas Thomas
  Member since 2023 · 111 posts · 70 votes
  1y
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Jay Hinrichs:
  
  Quote from @Lucas Thomas:
  
  Quote from @Stuart Udis:
  
  There’s no such thing as a passive investment in a “D” neighborhood if you’re the owner. I also don’t believe anyone suggested in this thread that cash flow is not important. Cash flow is important to the extent it covers expenses and provides reserves in order to obtain favorable debt.
  
  An investor who understands market fundamentals and invests in the correct markets will outperform the investor who purchases real estate in stagnant D neighborhoods.Thats the reality.
  
  Another factor not discussed is the disposition process of lower tier real estate. These transactions are disproportionately impacted by transaction fees as well and the only “natural buyer” is another investor often in markets with endless supply of similar product which impacts pricing dynamics. Usually these are properties with paper equity that never translates at time of sale. But I doubt I’ll get someone who can’t seem to acknowledge lower value real estate is disproportionately more expensive to operate to buy into this either….
  
  Silly Stuart.
  
  You operate in a state that doesn't inflate like mine do.
  
  My "D" properties are worth way more than your "A+" Townhomes. :)
  
  And I bought them for nothing (Meth Dens) over the last 15 years.
  
  And the operational costs are cheaper because I don't have to make anything pretty.
  
  You just want to die on this hill don't you?
  
  But seriously... I'm out.
  
  Toodeloo.
  
  P.S.
  
  Don't be mad that people like me exist and make passive income on "D" areas.
  
  Toodles!
  
  Dude, your experience posted on your wall is quite amazing.. everything is 1mil with 250k down and 10k a month or 100k purchase with 20k down and 2k a month.. also you say you are realtor a lender a note buyer etc etc.. pretty amazing
  
  And the markets you say you own or work in D class are basically less valuable than Stuarts D class dollar wise.. I think folks need to take a grain of salt with the things you post myself I am suspect .. Stuart has been a benefical member of BP for years and I know he knows his market and what he describes is true. Myself I rent our funds out to BRRR folks and flippers in all the markets you describe in your bio. And have done over 4k transactions including Philly.. Now to be fair I have not done anything in NM . But I do track some of the RE there as folks come to me to fund deals there so not a market I am interested in these days.
  
  But we are entitled to our opinions.. I personally drank the D class coolaid as a landlord and bought about 300 of them in many of the markets you are in. I exited them within 24 months.. Management was just too intense and there are better things to do with our capital like renting our money or building new homes and selling them to home owners.. But I realize BP has a lot of starter investors that just want to buy a rental or a few for long term investments.. And I think personally all the markets your in this can be done but I do recommend buying at the median home price and above for the out of area small investor to have the greatest chance of long term success..
  You have a weak stomach and just because you bought a bunch of properties wrong and hired the wrong people just goes to show you don't know how to buy in the asset class. Thanks expert.
  The whole point of this thread was to talk trash on Class D.  So I'm talking about the downsides of Class B+ and you primadonnas got all butt hurt cause you can't take the heat. If you can't operate in the "meat grinder", keep your opinions to yourself.
  Anyway..
  I'm done on this thread cause apparently going to someones profile and using personal attacks on people is tolerated. As I've been nothing but kind in my responses. I haven't called anyone the "S" word. I didn't go to anyone's profile and start making personal attacks. All I did was show that Stuarts properties don't make sense on paper, has a bad opinion on an asset class he doesn't own or understand, and he made a comment about if you just "build" them, you can win. Cause that's available for 99% of us. Lol
  And yeah, my profile is bare because I operate in an ugly asset class and people aren't very nice. Present company included. You keep trying to hurt my lil ol' feelings because I make money off something you can't. sad :( face.
  
  I am not talking trash about D class heck I make a great living funding those that are in the D class buy hold model.. Many of my clients own 200 or more doors and I help them buy more each and every week in cities like Baltimore and Cleveland and KC Toledo St. Lu Bham etc etc.. The point of this thread though is its not for everyone and certainly very risky for folks that are not local and cant scale.. In fact I personally will not loan to anyone who is not local. I will consider those that have a local partner though.. I have clients like CA based tech folks that partner with a local and are building larger portfolios.. But one off no way..
  
  As to the information on your Wall . A lot of Folks on BP look at those not to dissect or criticizes but to sum up the veracity of the person giving advice on BP.. So no way to really know what you have or dont have etc etc.. I will let others also have thier own conclusion about that.. If you make D class work for you.. Good for you.. Its sorely needed.. I know in Baltimore for instance I am super proud of what I do there in the D class area with my two clients that each own well over 200 row houses as I stated.. I funding a 23 home package for one next week.. they are all shells al blighted on one block each will take at least 100k for the full gut rehab.. so there we are pumping 2.5 million in cash into the hood.. that is something that my client can be proud of and I am proud to be his capital partner..
  
  then on the flip side you go to my 90 home new build Project in Oregon 750 to 1 mil each that I own and have been selling to owner occ and a lot of those folks are paying cash U know empty nesters down sizing to very nice Single levels.. So its pretty wild fund a home that can be bought for 10k then build 750k plus and we do some 2 mil plus builds in charleston SC. Kind of all over the map.. But I still go back to my roots at D class C class funding..
  
  And just because I dont care to own them like I said I had 300 at one time.. does not mean its bad for others to own that class.. The exception is the out of area going to buy one or two.. those folks I think take on more risk than they realize and would generally be better buying in a better neighborhood and asset class..
  
  We can Be friends again.
  
  Someone called Me The "S" word.
  
  And I can get quite heated.
  
  0 Reply
Ginger Rieger
Member since 2023 · 1 post · 0 votes
1y
So I suppose you would not recommend that I try to buy a property in the temple university area to use as section 8
0 Reply
- Alan AsriantsBusiness Member
  OP
  Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
  1y
  Quote from @Ginger Rieger:
  
  So I suppose you would not recommend that I try to buy a property in the temple university area to use as section 8
  
  Personally no, that nieghborhood is very unique. It is a college campus that surrounded by a class D area. More students are living on campus due to the safety concerns. On campus housing is also much nicer. If you miss a new school deadline and dont fill a vacancy by the start of the semester you are pretty much out for the year unless you want to rent to local market.
  [email protected]267-767-0111
  Alan Asriants - New Century Real Estate 590 Reviews
  View Page
  0 Reply
Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
1y
"And the operational costs are cheaper because I don't have to make anything pretty." ....I wasn't aware "ugly" liability insurance, recording fees, doc prep or tax prep costs less :) There's operational costs to owning real estate beyond repairs and cap ex. That is unless you've found a way to eliminate them from your business.
[email protected]
1 Reply

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