Brrrr in bad neighborhoods a bad idea

[Steve Barounis]

Hey guys I’m absolutely brand new to all of this. Brand new to this website, investing and real estate alike. I’m a police officer in nyc and looking to get into BRRRRing to start a real estate portfolio for passive income. From doing my preliminary searching it seems I can get started for very limited funds ($30,000) in some neighborhoods in the mid west. Some of the homes I’m finding are in that price range and it’s very appealing to pull the trigger just on the principle of thinking cheap is a good deal, aside from all other variables(rehab cost etc). Correctly if I’m wrong but it seems that usually houses and real estate prices drop in the neighborhoods that are less desireable, the kind that have increased crime rates and whatnot. So in this lies my question, is it a bad idea to buy a house in a neighborhood like this even though the prices of the home make it seem to be a good investment. What kind of inherent risk do you run as the owner of the property in areas like this. I’m well aware from all the time I’ve spent at work of the issues that arise in areas like this and the character of the individuals that live in those areas(generally speaking). I’ve answer millions of jobs(911 calls) in regards to landlord tenant disputes in which after investigating I’ve found the tenant may not have paid rent in months or even years as well as much less than desireable activities going on within the home unbeknown to the property owner. Furthermore I’ve felt bad for a lot of the property owners because some times there’s nothing I can do for them considering the housing laws set in place in nyc. I don’t want to make myself into a helpless landlord. Thanks in advance for all info.

[Jim K.]

@Steve Barounis

Hi, Steve. What you're describing is essentially what we do here in the Burgh. The difference is, it's taken me years to turn into a good renovation specialist so I can personally be on top of our renovations, and the properties we work on are in a very local area. Moreover, we are putting money into a depressed area that is on the mend, and the only reason we were able to ascertain that was that we are local and I was able to investigate the factors that made that inevitable carefully.

I'm not sure this is the wisest strategy for you to carry out long-term from a distance.