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BlogsCooler By The LakeWhy Not Every Property in a War Zone is on the War Path by Alex Anderson

Posted over 12 years ago

Why Not Every Property in a War Zone is on the War Path by Alex Anderson

It is a topic debated many times. Should you or should you not invest in a War Zone? In fact there are just under 300 posts on Bigger Pockets debating the value of these investments. For those unaware of what a War Zone is, I’ll break it down. I’m not talking about investing in Iraq or somewhere deep in the African jungles, I’m talking about investing in the inner city, the hood, the ghetto. What are some reasons for skepticism with investing in this area? For some it could be a lack of understanding of the demographics in the neighborhood, for other’s it could be the stigma of an area riddled with drugs, gangs, and theft. My goal with this article is to debunk the notion that you should stay away from War Zone investing, and encourage you to do your due diligence to see if this strategy will fit in your portfolio.

There can be many good pockets within the war zone. In Milwaukee, Laotian, Hmong, and more recently Burmese refugees primarily occupy one of these good pockets. I like to think of this area as a niche, an area that is often viewed as a War Zone. Yet it is an area full of culture, family, and an appreciation of community. Why did I pick this area? Well this is where my friends live and have grown up. It is home to many first generation immigrants from Southeast Asia who were sponsored by the churches and by family who live there. They end up purchasing a home and choose to stay to raise their family. The majority of those living in the area have done so for over a decade and have helped their family immigrate to the United States. When their family arrives, they generally stay in the same community.

According to an article written by USA TODAY, approximately 15,000 Burmese refugees arrived in the United States between 2006 and 2009; that’s almost 13 new immigrants per day (http://usat.ly/1eiHsEd). Between 2004 and 2011, 1,500 Burmese refugees have called Milwaukee their home, according to the Milwaukee Journal Sentinel (http://bit.ly/1eiGSGw). Where did they end up? They lived in squalor; placed in units where the owner had over 900 code violations across 23 properties. Where were the other investors? Where were those of us who take pride in our properties?

So before you turn away from a property that you consider to be in a war zone, I ask that you consider the community, and really get to know the why behind the what.

Comments (5)

  1. Lisa Phillips thank you for the read and understanding where I am coming from :)

    Alex Anderson, over 12 years ago


  2. Great posts, all of you! I say, not all "war zones" are the same, and some just look bad with actually being quite harmless. I would say that when you go into those communities and not overlook them, you get the biggest return. Not only are you earning and obtaining wealth, your little bit of money can make the biggest differences in putting value and worth into a neighborhood. You're branding that neighborhood as worth living in just by renovating it, and everyone in the neighborhood wakes up. Its funny how in these areas when you start fixing things up, the neighbors miraculously start pulling up weeds and changing broken light bulbs... TL;DR - Your money makes a bigger impact in these communities than in any other. That matters, as it continuously gives me a since of great pride about what your investment accomplishes. Great post @Alex Anderson

    Lisa Phillips, over 12 years ago


  3. thank you Dawn Anastasi and Al Williamson!!

    Alex Anderson, over 12 years ago


  4. Dog Gone It Alex, you're going to let the cat out of the bag :^) Nice job of breaking it down and illustrating how insight makes all the difference when investing in inner cities. You're friends gave you an unfair advantage - congratulations! These areas are not for every investor. Not even for most investors. However, if you're interested in making money AND doing something that matters, then inner cities are awesome places to place your focus. Can't wait for your next post.

    Al Williamson, over 12 years ago


  5. This is a great post!

    Dawn Anastasi, over 12 years ago