Investing in Portsmouth, Virginia

[Arron Achey]

Hello Everybody!

My wife and I are still working through getting our first investment opportunity and we feel were getting close. A lot of opportunities are steering us towards the Portsmouth, Virginia area. I've read some older posts in here about some government annoyances and issues of this sort but nothing more recent. With the naval hospital in the area, and a casino coming to the city soon it does feel like an area of good potential opportunity and growth.

Also a few off market properties have been dealing with contract owners. Is there anything to be cautious of in these situations? Thanks in advance!

[Patti Robertson]

Lordy, don't get me started on PTown. I actually like the city to visit. There are some great historic sites and restaurants there. That said, I have both owned rentals in Portsmouth and managed rentals in Portsmouth for a very long time. Personally I'm not investing another penny in that town, although I'm not selling what I own or turning down property management business there. It's definitely on my no-buy zone for a lot of reasons. Here are just a few. If you want to really know what is going on in the city, join two Facebook groups - Portsmouth, VA Fire/Police Scanner and Portsmouth Political Pulse. I venture to guess you will be shocked by what you read. I'd love it if you come back to this post and share your impressions. ;)

1) The city is overrun by gangs.  The police force is 90ish cops short.  

2) The real estate taxes in Portsmouth are the most expensive of any city in our market.

3) The politicians are corrupt and unruly.  Watching their activity is literally like watching a fiction comedy or horror show.  They don't act like mature grown up adults. To give you just a few examples... 

                   - The sheriff recently sued the city manager over the city condemning the city jail.  

                   - The city just fired their police chief, who was the best thing that happened to Portsmouth in a long time.

                   - The city manager just resigned to avoid getting fired and city council fired the city attorney.

- HUD did an audit of the SEC 8 office a few years back as a result of a tenant in city housing suing and discovered the Housing Authority had over $1M of HUD money that was intended for help voucher holders just sitting in their bank account.

- The HUD audit resulted in a law firm suing the Housing Authority b/c the H/A board selected a small attorney who was apparently a friend of a board member to represent them in the suit that caused the investigation instead of the large firm that has been vetted an was approved to be a government vendor.

                     - They don't have accurate accounting.  See my specific example noted in the old post below.

                    - Right now I am struggling to get a military member's judgment paid from a 2019 judgment.  Usually this is easy peasy.  The military always makes their members make good on their contracts, right?  Well, this is the case as long as we can get the proper proof of the judment in the format the military requires out of the city civil court clerk's office.  When I asked my attorney last week if he needed me to go camp out in the clerk's office to get what he needs this was his response " I have been going there physically over the months in an attempt to acquire what I need. When I asked if I could wait, I have been told everytime that they just can’t stop everything and wait on me. One particular clerk really got on the verge of an attack of some kind, at the presumptuousness that I would ask for such a thing. I have been promised that they will get it done and then I receive what they told me I would not receive. I will be going back there within the next week and I will try again. What I need is a copy of the actual pleading, which shows that Landis himself signed the document copied, and the Clerk will stamp it with a stamp that says abstract of the judgment. They are usually fine with just stamping certified on the copy of the pleading but they seem to be avoiding pulling the actual pleading in the cases of Landis. In the past, I have not had this much delay but I do want to keep whatever good rapport I have with them as there are future cases that we will need to get done. The clerks can be helpful or bury you when they do not like you, so I want to keep them on the helpful side."

                 - Most importantly - the rents are way lower in Portsmouth than our other cities.  People basically only live there if they work there, because in order to get out of the city the most direct route, you have to pay a toll, and those tolls just got announced to be rising again.

               - We have had two houses in Cradock shot up since Halloween.  One was one I manage for an out of state owner.  One was one I own myself.  When I say shot up, I mean 8-10 bullets into the house.  Both tenants have been with me for many years.  Both tenants happen to have 17 year old boys.  The gangs are recruiting 12-17 year old kids to do their shootings.  Gang retaliation these days isn't one gang member killing another gang member. Instead, they go after the family members of the gang members. That's why you keep seeing houses shot up, drive by shootings, etc.  

Here's an old BP thread about Portsmouth. There are others too. Just find them with the search bar.

https://www.biggerpockets.com/...