Buy what i can afford or wait?

[Jameson Sullivan]

I know this is going to ultimately come down to personal preference and risk tolerance but I'm curious what you all have to say. I'm refinancing my house and am hoping to pull out about 40 k. now, in my area in Tacoma wa there are definitely homes for under 200k and alot of them are in areas i see as high growth potential areas over the long term but currently are C- neighborhoods, if not worse. I could probably find something in a better area but it would require work and I wouldn't be able to afford that if I wasn't able to leverage the entire cost. There is definitely crime in the areas as in any downtown-ish area but murder and very violent crime have significantly decreased over the last 20 years. so here's my dilemma, rents would be great in those areas versus my mortgage and I think cashflow would be high. long term I see the area moving into a somewhat B- but getting better nonetheless but TODAY I would still have to deal with the kind of people that live in these neighborhoods and they're generally lower income, lower... let's say weaker moral compasses and such. so, should I get my name on a property this year and just navigate these things as I go? should I take the high cash flow and just use a PM? or should I hold out another year until I can afford something In a better area but which would also show less appreciation and less cash flow? All opinions or stories are helpful! I always try to add paragraph breaks but sometimes my phone doesn't do it so apologies for that. best regards, Jameson M Sullivan

[Andrew Johnson]

Jameson Sullivan Personally, I would take less cash-flow and find something that isn't in a C- area for a first deal. PMs are great but renters with a "weak moral compass" hurt your bottom line even if there's an insulating layer. I think most would agree that there's a financial reward of investing in an area that goes from C- to B-. But that comes with the risk of it going from C- to D. I would skew towards an increased risk/reward deal until I had a couple of deals that were more modest with "reward" (cash-flow) so that they could support the risk of a C- property in the portfolio.