St. Louis Metro East Market investment properties........bad?

7 Replies

I am new to this industry. I do live in the St. Louis Metro East, where we have several turnkey properties. The properties that we have are privately owned, newly renovated, off market, and CAP rates between 12-20%. Privately owned being my boss owns them all out right free and clear. I have been calling and calling and people are liking the numbers and everything about it, except the location. Is it because of Ferguson? These properties are 45 minutes from there and I am afraid the reputation has really put a damper on the market. It is hard to find a good rental, and 60% of people rent around here. Isn't it about the ROI? I am new so I am just confused.

@Gina Vaughn

St Louis Metro East is a big area and yes, Ferguson is something you have to take into consideration especially if the properties are in East St. Louis.

The press/media and outside crooks used the Ferguson situation for their own benefit but the locals pay for it. 

Vince, I thought that it might be the case. Considering these houses are newly rehabbed and start at $33,000 I didn't understand why they wouldn't move. These are NOT in East Saint Louis. Our properties are in Alton, Granite, Glen Carbon, Collinsville, Belleville, and Cahokia. It is such a shame what that did for our area. I thoroughly enjoy the perks of the city and do not run into the problems that the media has portrayed. 

With many of those cities being really close to East St. Louis I'd guess it's more the reputation of that city rather than Ferguson. Ferguson certainly didn't help anything in the St. Louis area, but East St. Louis doesn't have a great reputation either. People might be worried about self-managing or finding good management, and those factors might be affecting the prices people are comfortable with for those areas.

If they're clearing 15-20% being forced to hold them isn't the worst thing, even if it's not your boss's strategy.

@Gina Vaughn what sites are you marketing your properties at?   have you posted them on Zillow?       why not listed them on mls?

are there any rei groups in the cities that you have the houses in?      list them for sale there.

how many houses are you trying to sell?   what is the average monthly rental amount coming in?

@Gordan Cuffe we only cater to investors.  All of those people are wanting distressed homes, these are newly renovated. I have 16 that I have to sell, but there will be more on the list. I can get 100 if I needed to. Average monthly rent is $923. 

@Gina Vaughn  I'm curious as to what level of rehab you accomplished on these properties and are still able to sell them at a profit in the 30k+ range. I think most experienced investors can tell the difference between a simple paint job vs. a 1/4" drywall re-skin vs. a full-gut rehab with re-wire and re-plumb.