Run Down Street, Pot Shop, Hot Market - Opportunity or Stay Away?

[Katie Bond]

I'm looking at a property on a run down block with a mix of commercial and residential properties (the property across the street is really run down but many of the others aren't bad at all). I'm trying to figure out if the street is going to get better or worse in the next 5-10 years. Anyone with experience buying in less than perfect neighborhoods have any tips for how to judge whether a property will be a good investment or not? What should I be looking for?

Also, Colorado folks, any ideas on whether a pot dispensary is good, bad or neutral in terms of property values? Would you want to invest across the street from one? Many thanks!

[Bill S.]

@Katie Bond I think the key term is in the path of progress. Look at the area around the street. Are homes being fixed and flipped or even better, additions being added, or the small shacks scraped?

What is the character of the adjacent residential? If the area is in transition from low income to gentrification then the commercial is a good bet. Commercial is always the last to turn. If there is not a lot of turnover in the adjacent neighborhood then the character of the commercial area is not likely to change any time soon.