Realestate in slum neighborhoords - Posted by Ron Crawford II, Philly

Posted by HR on July 26, 2001 at 08:40:06:

nt

Realestate in slum neighborhoords - Posted by Ron Crawford II, Philly

Posted by Ron Crawford II, Philly on July 24, 2001 at 12:06:10:

Hello,

Would you take out an investor loan to buy property in an urban part of the city? The cashflow is pretty good but the neighborhood is not so good (Wouldn’t want to go there at night!). Should I risk taking out an investor loan on this type of property?

Would you take the risk with the loan for the cashflow from the property? -thanks in advance.

Regards,

Ron Crawford II

Re: Realestate in slum neighborhoords - Posted by Columbus

Posted by Columbus on July 24, 2001 at 22:31:01:

Ron, I have several properties in Philadelphia, and Tim is right about clearly defining slum. I would not call the areas where my houses are located a slum, but most of my friends(who live in the suburbs) would. There can be many advantages to what Tim refers to as Fringe areas. I never have a problem finding tenants, the phone rings off the wall when I place an ad, I look hard at length and verifiability of employment and usually find decent tenants. I have had worse problems in the suburbs with “the gentry”, than I have in the city. I always visit the current home of the prospective tenants to see how they live. If they object to this requirement, I know they have something to hide. I think the most important thing in the city is to buy the properties cheap. I have almost always found private deals by walking the neighborhoods and talking to people, rarely have I found anything throughthe MLS. Philadelphia is full of abandoned houses, even in the better areas. The rental market in center city is very hot and has pushed up rents and occupancy in all the adjacent areas where deals can still be found. I recently bought a sfh for $9000 1 block from new townhouses going for $350,000. It needs
a lot of work and is smaller than the new houses, but the demand for housing is high. You need to really get to know the neighborhoods at all times of day to make a good decision about value. You need to get out of the car and meet the people who live there. If you are not comfortable doing that, you should not buy there. Good luck.
Columbus

Re: Realestate in slum neighborhoords - Posted by Carey_PA

Posted by Carey_PA on July 24, 2001 at 22:25:46:

Ron,

It all comes down to what your particular goals are and how you want to get there. As Tim pointed out, he does well with his neighborhoods.

HR that posts here also does “section 8” type neighborhoods…are these what you are referring to as slum neighborhoods??

I, myself, plan to have some section 8 rentals in the future with a positve cashflow of AT LEAST $300/month.
These would in fact be in neighborhoods that I would NOT ever live in and well, maybe I’d go there at night, but I’d rather not :slight_smile:

It’s all about what your goals are Ron…

CAREY

Define slum neighborhoords - Posted by Tim Jensen

Posted by Tim Jensen on July 24, 2001 at 21:31:35:

Ron,

I think you need to define slum neighborhoods. I invest in fringe areas. Fringe means on the outskirts(about 10 blocks to 1 mile away) of the bad areas. This are pretty nice areas and I have no problem getting my places rented. Funny thing is that all my neighbors think that its a slum area and that I am dodging bullets. So, I think slum is a subjective term unless defined.

Tim Jensen

Re: Realestate in slum neighborhoords - Posted by Steve-Atl

Posted by Steve-Atl on July 24, 2001 at 15:10:47:

I stay away from slum neighborhoods because it’s just not necessary…no matter how good the cashflow looks.

With the right knowledge you can buy pretty houses in great neighborhoods without taking out any “investor” loans.

Read, learn, and seek the advice of those doing it.

Re: Realestate in slum neighborhoords - Posted by Valerie PA

Posted by Valerie PA on July 24, 2001 at 13:52:46:

Don’t do it!! Try the burbs instead… unless being a slumlord is your goal.:wink:

I have to disagree with Sue T on her mention of Port Richmond. I was just down there to buy carpet (Lomax) and I was almost in tears at the condition of the neighborhoods. My parents both grew up there and I was practically raised there because both sets of grandparents still lived there. My advice is to focus on the burbs and get the sellers to find you!

I am in Feasterville, send me an e-mail if you want to chat.

Valerie

No!! (nt) - Posted by DanT

Posted by DanT on July 24, 2001 at 13:36:29:

1

Re: Realestate in slum neighborhoords - Posted by Sue T

Posted by Sue T on July 24, 2001 at 12:24:35:

Ron, I have more questions than answers. I’m just starting and I want to know the same thing. I am originally from Philly and did a lot of visiting nursing in all areas. I would stay away from the north philly and kensington areas right now. Port Richmond still looks good. West Philly is nice and parts of South Philly. I’m looking into Camden and Gloucester City in NJ. Same thing. Some people have a fear of the city because they’ve never lived in one. I don’t and there are plenty of decent people who need a place to live. I just wonder if I’ll be able to resell. That’s were I think a local real estate investment group would come in to play. They would be more familiar with our area. I’m looking forward to seeing what responses you get from this. Good luck to you, Sue from NJ

Excellent advice (nt) - Posted by HR

Posted by HR on July 28, 2001 at 17:16:48:

nt

Re: Realestate in slum neighborhoords - Posted by HR

Posted by HR on July 25, 2001 at 08:27:55:

Ron,

I buy in areas that qualify as warzone by any stretch of the definition. When you can buy homes for 5k, fix for 15k, and rent for 850/month section 8, they are hard to pass up.

I woulden’t start here.

Become a landlord first with a regular property, then look to get into the low income stuff. Beware: once you’ve tasted the cashflow from this low income stuff, there is no going back!

Mr Landlord (www.mrlandlord.com) sold an excellent book called perpetual money machine about inner city rentals. Jim Piper tells me that a guy named Jay Decima also does this. Check both out before you invest. These deals can steal your cash, enthusiasm, and potentially your life if you don’t know what you are doing. When you do know, though, you can retire off them in a few short years.

Cheers,

HR

Re: Realestate in slum neighborhoords - Posted by Carey_PA

Posted by Carey_PA on July 25, 2001 at 12:11:49:

HR,

I checked mrlandlord.com for that perpetual money machine book, but couldn’t find it. Do you have an author’s name, I may search online for it or hit the book store???

I also, put in an email to mr.landlord.com to see if they do in fact have it, but I can’t see it :slight_smile:

Thanks Hal and I hope to see you at the NEXT convention!

CAREY

Re: Realestate in slum neighborhoords - Posted by John(PA)

Posted by John(PA) on July 25, 2001 at 16:19:57:

Carey,

The book the HR mentioned is called Perpetual Income by Bryan Wintermeyer(sp?) and it’s well worth the $40. Here’s the link: http://www.mrlandlord.com/mllshop/build_wealth.html