How much crime is ok?

[Stephanie Cabral]

I'm looking at a two family to purchase in a well-kept neighborhood that is a few blocks away from a rougher neighborhood. The deal is over a 2% deal, more like 2.3% with a strong renters community. My agent used to own in the area and is nervous because he says it was run by gangs then but as part of my due diligence, I reached out to the police department to ask about the call log for the street and the surrounding grid  and they mentioned they haven't had gang issues in years. They provided me with a fairly long report but all were non-violent crimes, except for a few domestic disturbances. On the street in the past 5 years, most of the calls are suspicious behavior, noise complaints, etc with a few motor vehicle burglaries and one auto theft. There was one burglary (breaking and entering) and one arson committed by the property's tenant. I'd consider this a C neighborhood and can mitigate the risk by installing motion activated flood lights and security cameras. I'm inclined to proceed with the purchase but wanted to get thoughts from you all at BP. 

Thanks in advance for your input!

[Michaela G.]

That doesn't sound like a dangerous neighborhood to me. 

Domestic disturbance is obviously in-house related and should not have anything to do with your future tenants/buyers. 

Suspicious behavior and noise complaint calls show that residents are watching out and are willing to speak up . I think that's a great sign. 

Motor vehicle burglaries are usually due to people leaving something in their car, that can be seen from the outside. A very opportunistic crime and not normally targeted. 

Only one burglary is very low.

Sounds like a good neighborhood to me.

[Kevin Siedlecki]

@Stephanie Cabral - Anything over 2% in CT is probably not a great neighborhood. I wouldn't want to invest in the neighborhood you're describing, but that's because I want more of a hassle-free area, even if it means slightly lower returns on paper. I'm also not high on the long-term outlook of anything more an a few miles from Yale, since basically everyone else is fleeing the state.

[Stephanie Cabral]

@Kevin Siedlecki- I agree  but I strongly believe the property is improperly marketed so I'm looking at the potential numbers. The way it's currently positioned it would not reach 2%. 

[Rick Santasiere]

Stephanie Cabral 2%+ in CT is fantastic as Kevin stated. If your key priority is cash flow, and you ran your numbers including a slightly higher capex/vacancy rate (higher turnover area I would presume), followed by property management that you trust, go for it. If self managing, it may not be worth your "time," but I am not sure how you have the rest of your properties set up. I, personally, would not invest in that area because I run my own property management arm, and try to shy away from areas that may challenge my "time value." I actually would consider investing in an area like that, if I had another trusted PM that handled it, if the numbers still worked that is. I think appreciation, value add, and resale would have to also be low on your priority list as well. Of course value add "could" be an element that works in this deal if BRRRR is your end game. Keep us posted and I look forward to hearing more about it later this month in rocky hill!!

[Russell Brazil]

I laughed out loud a little when your agent warned you about the crime and gangs. That is a big no no. Agents should never discuss crime with their clients.