Scared of "Bad" Neighborhoods? - Posted by smilin_mark

Posted by Rolfe on July 07, 2001 at 23:57:14:

Barbara;

All my tenants mail my rent to me. Regardless, I am in the inner-city, “those areas” on almost a daily basis.

After several years experience, it’s very clear to me that I am not in danger in the inner city. Drug dealers and gang menbers are in danger. Most of the crime in the inner city is inner city people commiting crimes against inner city people. Once in awhile, one of my job sites will be burglarized, or a vehicle will be broken into, or something is somehow stolen. Once in awhile, I’ll find someone sleeping in a building under renovation. That happens on job sites all over. The important thing to do is to take percautions, just like anywhere else.

In my opinion, the main factor of working in the inner city is one of comfort. Being white, I’m often a minority. Peoples behavior is often different than I’m used to, and people may live in a manner different than my own. But that is not threatening.

Rolfe

Scared of “Bad” Neighborhoods? - Posted by smilin_mark

Posted by smilin_mark on July 06, 2001 at 11:15:49:

I was recently contacted by a seller that owns 1 SFH, 2 duplexes, and a 4-plex that he wants to sell as a package. He is willing to help with the financing and it appears that the combined cashflow will be a little over $1200 a month. However, the properties are located in what I would consider a “bad” neighborhood. My theory is that if you have well maintained properties and screen CAREFULLY, you should be able to find responsible tenants. However, right now I only own rentals in nice neighborhoods, so any insight would be appreciated.

Mark

A Story about Blood on the Streets - Posted by Rolfe the Renovator

Posted by Rolfe the Renovator on July 07, 2001 at 24:04:55:

Mark;

There’s not a neighborhood in the Mpls/StP area that I would not buy in. I’ve bought in some of the roughest, and as a result, I’ve scene some of the worst. A stabbing victim bleeding to death in an alley, a drive by shooting one block from where I was raking leaves, drug deals by the dozens, and the subsequent stare-downs with some lame punk dealer who’s probably armed to the teeth.

These areas often have a high percentage of motivated sellers, and that is who I try to find. This week I got a tip that a triplex only a few blocks from where I own property was the scene of a drug bust. I called the owner, and expressed my interest in the property.

Many times,“street people” will approach our jobsites looking for work. The employment screen they receive is my business card. If they return a call to that number, I’ll talk to them about working. Most won’t return the call. Some will, and most of those won’t last a day.

Several weeks after hiring one particular gentleman in the manner described above, he asked me if I was still having break-in and theft problems at my renovation projects. Thinking about it, I answered we had not had any break-ins for awhile. He commented he’d be surprised to see so much as an empty soda pop can in the yard. I threw a questioning look his way, and he told me the Bloods street gang were watching out for my properties. They were doing this, I’m told, out of respect. They respect the fact that I hired a local guy off the street.

He was an inacctive member of the Bloods. (Emphasis of inactive - apparrently, you do not want to become a former member.)

He tells me that word got around that I had hired a guy off the street, a guy who happened to be a member of one of the most notorious gangs around. The neighborhood, and the Blood, respected that action. As a result, he says, the Bloods are “watching” my houses, and that nobody will bother those houses from now on.

Two years have ticked bye, and that is the absolute truth - not one problem. The young man who started the whole thing did not last long, vanishing after he called me late one night, desperate for $40.00 To this day, those properties, surrounded by trouble, remain unmolested.

An uneasy, unofficial, undiscussed, and understood partnership. I’ve never quite known what to make of the whole thing.

Hmmmmm; Rolfe

Landlord moving up… - Posted by JT - IN

Posted by JT - IN on July 06, 2001 at 19:28:13:

is what causes a person to sell these properties, in a package, such as you described. It is “The grass is always greener on the other side of Town” syndrome. There is no treatment,or cure for this disease, just buy the properies at the right price, and put him out of his misery.

Some of the best tenants that I ever had, were in the really “bad” neighborhood; that is, before I moved up. You should be well compensated for dealing with these “bad” neighborhoods, by buying right, and getting good tenants that pay. Pretty simple, but the fear fo the unknown can make this seem worse than it is. Now these properties are not for everyone, they cna be very profitable, if bought right, and managed correctly. Does that sound like you? Good Luck.

JT - IN

Re: Scared of “Bad” Neighborhoods? - Posted by Ronald * Starr

Posted by Ronald * Starr on July 06, 2001 at 16:34:26:

Mark---------

Sounds like you are pretty much leaning toward buying these properties. Most of my properties are in the below-average neighborhoods and some in the below-below-average ones.

You are right about selection. I have to look at 15 to 20 applications to find somebody to whom I want to offer the properties. Check people out carefully. About 80% or so lie about where they are or have lived or from whom they are/have rented. Check that first.

I have had some wonderful renters. By being selective, I have gotten a lot of long-term renters–3 years and more. I select on stability. The most recent people I rented to had been 10 years at their old place but the owner sold the house. They helped me repair the fence and also paint the exterior, jobs I had delayed doing so as to get the interior ready first.

However, there may be a reason to be more careful in these types of neighborhoods. I’ve had windows broken, so like to have the windows either boarded or covered with window screen. Things will be stolen – we had a new 5 gal bucket of paint stolen out of the back room of a house when we were painting the side. Somebody carried it up and over the fence. So don’t leave tools, sinks, toilets, etc in a property when it is vacant, nor outside when working on a property. Keep your car or truck locked, so your tools don’t walk out. You will have people asking you for work. I recommend you not hire people off the street. There are questions of quality and honesty.

Good Investing********Ron Starr**********

Re: Scared of “Bad” Neighborhoods? - Posted by Sandy

Posted by Sandy on July 06, 2001 at 13:14:40:

I had to get over the “good/bad” neighborhood hurdle. What Travis said is correct; nice people do live in bad neighborhoods. Just remember people do live in and own these properties. You don’t have to live in them but you can own them. Something else to consider, why is the neighborhood considered bad and how long was it that way? A lot of bad neighborhoods just need to be revitalized and good inexpensive housing could be a part of that.

Just my thoughts,

Sandy

Re: Scared of “Bad” Neighborhoods? - Posted by Travis (Dallas)

Posted by Travis (Dallas) on July 06, 2001 at 11:47:16:

The first rental house I ever bought was in a “bad” neighborhood. There was actually a bar on the street behind it that was a stones throw away. It turned out to be the easiest rental property I ever owned. The first lady lived there 10 years and was buying it Contract for Deed. When she decided to move to Florida, she asked if her cousin could take over the house. I recently transferred Title and we all lived happily ever after.
I think I went to the house only twice in all those years to do any work. I occassionally would drive by to make sure everything looked o.k.
I don’t have any words of wisdom…I was lucky and thankful.
All I know is that some great people live in poor/bad areas. We need them & they really need us to provide affordable safe housing. It just takes a little effort to find them.
I try to structure everything that I do on a Win-Win basis & so far have been blessed.
Good luck.
Travis

Re: A Story about Blood on the Streets - Posted by Barbara (FL)

Posted by Barbara (FL) on July 07, 2001 at 11:05:53:

Did you give him the $40? Don’t know how I’d handle this–what did you do?

Love 'em… - Posted by HR

Posted by HR on July 06, 2001 at 18:36:31:

Mark,

Ron has given you good advice (no surprise). What is interesting is what you consider “bad.” I strongly suspect your bad is my very good. I own stuff in low end, border zone, war zone, next to projects, etc and I like 'em. You can really steal these properties (10cents on the dollar).

Place burglar bars on the outside. I too have had guys break in just to steal a lousy ten galleon bucket of mud, etc. I rent mine section 8.

The only wisdom I have for you is everyone wants to live in the best neighborhood they can afford. We all upscale, when we can. You will get some real dregs here, and moms don’t want their kids in the real hardcore warzones. But that still doesn’t mean you can’t make a killing. You just have to be very involved, and very aggressive.

I make about $350/month positive cash flow off of each house (after piti, and $100 aside each month for vacancy and repairs). If your cash flow is much worse, you are paying WAY too much.

Good luck,

HR

Re: A Story about Blood on the Streets - Posted by Rolfe Kurtyka

Posted by Rolfe Kurtyka on July 07, 2001 at 13:45:27:

Yes, I did.

I shouldn’t have. The guy had a habit, and was wasted. All he did with the money I gave him was get higher.

Next time I saw him, I let him know it was way out of line to call me in an intoxicated condition. After that, never saw much of him.

Several months later, he called me fro a treatment center. He sent the money back.

Rolfe

Re: Love 'em… - Posted by DavidV

Posted by DavidV on July 07, 2001 at 09:58:54:

Hey Hal, any other advice besides the burglar bars with these properties. I’m looking at a bank owned property that people have broken into and beaten it up pretty bad. Not the best neighborhood. I sure would hate to keep fixin this thing over and over.

David

You and Piper… - Posted by David Alexander

Posted by David Alexander on July 06, 2001 at 21:40:17:

with those D A M N houses you can buy at 10 cents on the dollar…

Scary!

I keep telling myself I’m going to but don’t ever take the plunge…

Good to see ya around,

David Alexander

Re: A Story about Blood on the Streets - Posted by Barbara (FL)

Posted by Barbara (FL) on July 07, 2001 at 20:21:27:

I was really glad to hear the outcome of you giving the guy the $40. I think it was good that you did that! I just was thinking that if I gave the money I might have everyone in that area calling for money. I think you handled it the best way! Thanks!
Another question: In those areas of town do you have to go collect the rent or do they mail it to you? Thanks again!