All Forum Posts by: Randy E.

One of the first things I do is talk to the immediate neighbors on either side, then walk the neighborhood.  I usually walk the neighborhood every time I visit, if I have time.

Currently, I'm working on a house I bought in a nearby town and have gotten to know the neighbor across the street very well.  She called a neighbor on one side of my house and he lets us use his driveway occasionally.  And she called friends who came and took away some of the junk furnishings my workers had taken from the house and put on the curb, which reduced by half the amount of stuff that went into the dumpster.  Near the end of this project, I'm going to send my guy over to her house to install a new toilet because she mentioned that it's the only thing in her house of 30 years that is currently giving her a problem.  A $100 toilet is a small price to pay for all the help she's provided over the past few weeks.  My lead guy likes her so much, he's not even charging me to install it -- not even if he has to (likely) repair the subfloor also.

A few days ago, a not-quite-middle-age working-class guy working on the house behind my project house made a loud smart-alec comment while I was nearby.  To his dismay, I approached him and struck up a conversation.  He was peeved about something minor, but it turns out he was doing yardwork for his grandmother, for whom the entire neighborhood is named.  Before long, he's showing me pictures on his phone of his garden, cooking and handyman work, and exchanging numbers with me.  Just maybe, I've located a handyman in a town I'm hoping to buy more houses in.  I could have handled it differently, angered him more, and maybe had him vandalize the house one night.  Instead, we both end up laughing and liking one another.  If I had the funding, I'd buy ten more houses there.

It's easy for an investor to go into a new low-income area and get turned off, or worse, create enemies and put a target on the project property.  It's also easy to go there and develop friendships and partnerships with the neighbors.  It's all about handling the situation the right way.

 Skye,

I wasn't trying to be hard on you.  It might be that you are perfectly suited for investing in that area, and that your hesitance comes solely from being a newbie.  That's entirely possible.  My first purchase, the act of buying and investing, rattled me.

I just want to make sure that YOU make sure you know as much about the neighborhood before you spend your money.  Don't listen to anyone else sell you on the area, or try to convince you not to invest there.  You should learn as much as YOU can, and that 1st hand knowledge will allow you to make an informed decision.

Good luck,

 It has been a GIANT surprise to me over my time on BP to see so many investors complaining about "bad" investments in "bad" neighborhoods.  These investors almost never look in the mirror and admit that maybe, just maybe, part of the problem lies in their personal inexperience in efficiently dealing with the situation they chose to put themselves in.  Usually a decision made with almost no personal research into where they are investing.

Afterwards, there are always complaints about a neighborhood, or bad tenants, or an entire tenant class being labeled as undeserving of their services as a landlord.  The reality is, those investors have no business trying to do business in neighborhoods and with people with whom they don't understand and have no desire to learn.  After all, no one forced any investor to invest in any specific place.  If you made a decision that doesn't match your qualifications, admit your mistake and make a better choice next time.  OR, stop whining and learn the skills needed to be successful in those areas ... then go out and be successful in those areas.

And if anyone has made such a bad decision in NC and wants to move on, please PM me the address(es) of your mistakes and I'll be happy to take them off your hands.

 Personally, I would negotiate the lowest price I could and if the numbers worked, this would not deter me.

For your decision, that's all about you.  How have your living arrangements been throughout your life?  Have you always lived in B+ or better neighborhoods?  Have you ever had (and visited) friends who lived in low-income neighborhoods?  The house that you are planning to buy in St Louis, how would you feel hanging out in that neighborhood and having a barbecue with the neighbors there?

There are not right or wrong, benevolent or got'cha, or trick answers here.  But, if you don't have experience in those sorts of neighborhoods, and even moreso, you don't have life experience with the socio-economic type of people who would be your tenants, that's your answer.  Not every investor is suited to be a landlord in every possible neighborhood.

If the reality of a stolen meter surprises and rattles you, I think you are probably better suited for being a landlord in other types of neighborhoods.

 It happens.

 And that is the real answer to your dilemma.  It's not that quads don't exist.  It's that quads don't exist in B+ neighborhoods at C- prices.

Take a walk on the wild side, Sam.  It could be profitable, and it might not be as bad as you anticipate.  ;)

 For some.  For others, the difference is not so well-defined.

I agree, John.  I remember the first time it hit me about not moving/installing an appliance myself.  3 years ago, I had a house that suddenly needed a new stove.  I immediately started mental calculations about rearranging my schedule, searching craigslist, visiting used stores, etc.  Then I remembered a young guy who had a large used appliance store housed in an old restaurant.  I went and picked out a stove, then he asked if I wanted to have it delivered.  It took me a moment to consider the extra $35 delivery fee, before I said yes.  After it was delivered and installed (without me even being present, because I'd put a lockbox on the house for that delivery,) I decided I had turned the corner on being that much hands-on as a landlord.  

I'm doing a rehab now and I haven't transported one piece, nor actually personally "shopped" for anything except door locks.  It feels good to be able to step back one step and let trusted subs handle that for me.

That said, I think it's important for newbies to do most of this stuff themselves.  I learned a lot by being a part of every step in the early years.  That helps me know when a sub or vendor is not doing it correctly, or trying to take advantage.  You can't learn these things second hand.  If you have more money than time, then maybe you never have to learn on the job.  If, like me, you had/have less money than time, you will be rewarded by going through this process.

TLDR: Get the truck, but get an inexpensive one.  I didn't have a truck, but I do own a van that could/can transport appliances.

It sated my curiosity.  And I learned something new.  

Thanks.

@Andrew Bourgeois, what was the ending to this story?