I would like to know how the experienced buy and hold investors determine where they want to own rentals. I know it’s a vague question. What I am trying to get at is to compare to my area. I live in a suburban city about 15 miles from a major urban city, Detroit. The city itself is a pit. I know, I used to live there, and in my truck driving days, I went all over the entire city. If there is 5% of it that is fairly safe, I would be surprised.
However, I also realize that the city is where low income people live, and where the lowest value properties are. But it comes with a price, as most of the city is drug laden and has higher crime than suburban areas.
I would like to hear of the quality of neighborhoods that the experienced buy and hold investors own rentals in, and possibly an example or 2 of the housing values and rent rates in their area.
As a side note, after I get home in a couple of weeks, I am going to run my ads, pick up the business cards I ordered, and send out some postcards. Also going to drive neighborhoods, and call FSBO and rental ads. The cold calling is just to get some experience talking to sellers. If I happen to get lucky, all the better, as I realize this is not the best way. I am going to look for sub 2 and wholesale deals right now, and hope to do rentals sometime after building up some capitol and improving my lousy credit.
I may have already found a sub 2 deal by chance, as I overheard a man in a store talking about possibly having to move fast at the end of the month, depending on his company. I just went up to him and started talking, and he will not have time to sell the traditional way, and said he will strongly consider doing a sub 2 deal.
The main thing of this post is that I want to know the caliber of houses and neighborhoods that the buy and hold investors are renting in.
Just buy near the bus station – that’s always a good area!
I live in what used to be the 2nd largest urban area in the state. Right now, with most of the folks in New Orleans displaced, I guess we’re #1. This is Louisiana, so that’s not really saying all that much m(this is not a really densely populated state!)…I would guess that the two city area has about 350K folks.
I only buy in Bossier Parish (no counties for us, the rest of the country does that – why should we?)…we are on the east side of the Red River, Shreveport is just over the river on the west side. The schools and the general quality of life are better in Bossier Parish (fact). There are only 1 or 2 “sketchy” neighborhoods in Bossier. Shreveport has places that make me uncomfortable in daylight, much less at night.
We buy in the older, “blue color”, working class neighborhhoods. Lots of pickup trucks, bass boats, dogs in the yard, etc. These folks are the renters of the world. We also have the Air Force Base on our side of the river. We actually target the military folks thru the base Housing Office (it’s free and we ALWAYS get interested folks). We pay between $50 and 65K for properties (2/1s and 3/1s mostly). and get rents from $625 to $800…they ALL cashflow. Right now (today) I could probably buy a half dozen that are decent enough. All of our house are structurally and mechanically sound and just need some cosmetics, normally $1500 or less (paint, carpet, elbow grease, etc.).
I never tried buy & hold before, because in my market appropriate properties for rentals costs between $45k-$55k and they rents only for $300-$375.
However, i was caught with a decent condo apartment that i bought in courthouse for rehab ( buy, fix and sell strategy), but i can t sell now ( we re in the middle of a bear market), so i m thinking to refinance it and then rent the bedrooms to students.
Here’s what I learned in Hartford, CT
If your agent dons a Kevlar vest to show a property, don’t buy there.
Seriously, if the license plates are inside the cars instead of out on the bumper that’s a sign of a troubled neighborhood.
Bars on the first fl windows are cause for caution but second floor window bars are definitely a red flag.
I was able to find decent properties in areas of Hartford not considered the best because I did my research.
I started by bringing a copy of a Hartford street map to a realtor and asked him to section off where not to buy then focused in the other areas.
Even Detroit will have neighborhoods that are ‘coming back’. You just have to know how to look.
I like to be one step up fromt he “bars on the windows neighborhoods”. These are still “working class” neighborhoods, but at least some to many of the houses will be owner-occupied and show some sense of owner pride. These are usually older, well-established neighborhoods with small tract houses.