How to define A, B & C?

[James Wachob]

Lets define A, B, and C

There are many definitions floating around attempting to define investment properties.

I like to start with the community in which the properties is located.

A neighborhood = 95% homeowner or better

B neighborhood = 65% homeowner or better

C neighborhood = All renters

These neighborhoods could also be defined by the land value, on which the subject property is located. In an A community the land value is high enough that if the subject property were to burn down, it would make sense to rebuild a bigger and better property.

In a B community the land value should be substantial enough to rebuild the same property, in square footage and included features.

In a C community the land does not support rebuilding, and the lot will remain vacant for years to come. 

Then I look at the condition of the property

A = Brand new construction

B = 1975 and newer homes with a FULL renovation (Roof, HVAC, Appliances, All hard-surface floors, Exterior and Interior cosmetic repairs and paint, Hardware replaced, New light fixtures, Fenced in Backyard, and more!) my average FULL renovation cost between $25,000 - $35,000 in Memphis

C = Rent ready. Just livable