Would you invest in buy and holds in St . Louis City?

[Cynthia Smith]

Hi everyone, quick question. Are there any investors who just love investing in class C neighborhoods? Why or why not? What if the buy and holds are for the right price? These are located in the city of St. Louis, they are not turn key properties however will be great section 8 properties. When choosing to invest in Class C properties, what do you base your decision on?

Thanks a lot for your feedback.

[Peter MacKercher]

There is a C neighborhood that I like to invest in south saint louis city.

Criteria : is no difference then i look at property in any area.

• Actual rent and projected rent 
• ROR 
• out of pocket cost
• Building (whether it has been updated or price need to get it update it)
• Area
• Apt layout
• ease of rent 

[Cynthia Smith]

Peter ,

Thanks for your response. Would you be interested in total rehabs in South St.Louis City? If the price is good and great cash flow but need lots of work ? 

[Peter MacKercher]

Feel free to PM me and I will take a look. 

[Cynthia Smith]

Ok great. Thanks !

[Mike D'Arrigo]

@Cynthia Smith Personally, I don't think there's anything wrong at all with C class neighborhoods but it depends on how you define C class. My definition is a lower income, working class area that isn't in the hood. It's when get in to the very cheap, D class neighborhoods that you're likely to have a tough time. We sell turn key's in A through C class areas in Indianapolis and Kansas City have had a lot of success with all classes. The key is proper tenant screening and good property management. Having said that, as a rule you will get more consistent tenants in higher class properties but it's a risk/return tradeoff that you have to weigh and decide what works best for you. My advice is not to dismiss C class right off the bat though. I'd also recommend talking to a property manager in your area and get their input.

[Gordon Cuffe]

@Cynthia SmithYou will just need a good boots on the ground so that you don't get stuck with that one street that is going downhill. You will also need a good honest property manager. I used a crooked property manager in St Louis last year so just be careful with that. That same pm. scammed many other investors also.

[Frankie Woods]

@Gordon Cuffe, are you willing to share the pm company?

[Mackal Smith]

@Cynthia Smith I actually love investing in South City (St Louis). I just closed another deal today and have another coming up in April. This will put me at 11 units in a little over a year. I have bought many of my units off of MLS however I have a realtor who is also an investor and well connected so she finds some deals for me that I buy before they hit the MLS. I would say my properties are all B, B-, or C+ neighborhoods. For me it comes down to having someone I trust that knows the city well and understands who is investing where and how improvements are affecting the area. When I think about it, I really have a fairly small patch of properties where I have invested around the Dutchtown area. So far my property prices are low, the rents are fairly high, and the turn-over is low. The property I closed on today was a duplex at 54K. I needs a roof and tuck pointing as well as a single gas heating unit, but the rents are $650 and $700/mo. I bought them with 20% down so my cash on cash return is outstanding. Same thing for the one I'm closing on in April. I'm buying it for $72K. It is a 4 plex with total rents of $2K per month, again great cash flow but I could have bought 2 blocks on either side of them and I would definitely had to worry about high crime etc.

For me, I live close to STL so it's only an hour or so to be at my properties. Still, I could not do well without a crack team helping me. I have an awesome realtor, property manager, lawyer, CPA, and Inspector. Without them I could find myself in hot water.  With their help I feel completely competent that I am finding great deals in those areas, and I'm completely confident that I can hold them and make great returns for the next 30 years... 

[Tim Barrett]

Mackal,

I am actually looking at purchasing my first investment property in areas near where you are investing.  Would you be willing to share any recommendations for a property management company?  

[Ari Rada]

I work with a bunch of people who do similar types of investments in a bunch of cities in the country including St. Louis.  St. Louis is definitely one of the best, however the best place I have found so far has been Philadelphia due to the extremely low property taxes, low vacancy rates, and increase of jobs in the past couple of years.  That is where I work and do most of my investments.  

[Mackal Smith]

@Tim Barrett My realtor is Riahna Kastner, She is the owner/broker of St Louis Real Estate Society. She also manages my properties for me...

[Tim Barrett]

@Mackal Smith Thank you for the recommendation!  I will be sure to look her up.