Rental Property Investor · Honolulu, HI · Member since 2018 · 335 posts · 251 votes
I'm looking to buy some good cash flowing multifamily homes. However, the only ones I've come across so far are in really sketchy neighborhoods with high crime and unemployment. Are there properties like this in A or B Class neighborhoods?
Rental Property Investor · Michigan City, IN · Member since 2015 · 530 posts · 741 votes
7y
@Daniel Kong If you want to find these there is likely to be some issue which isn't necessarily a bad thing. All 4 of my multi-family properties are in A or B class neighborhoods and they are great cash flowing properties. The market your in plays the biggest role. Secondary markets and smaller are your best shot. The "hot" markets are going to be really tough.
Beyond that are the units outdated, exterior neglected, or some other deferred maintenance or management issues? If you can find these you are likely to stumble onto some great opportunities. To put it in perspective my 8 unit in a great neighborhood needed exterior TLC.. a lot of it. But now I am able to bump up rents $100 to $200 with very minimal interior upgrades between turns. Great tenants didn't want to live in a neglected property but when cleaned up want to live in this neighborhood. I bought it at an 8.5 cap on trailing numbers which is pretty good. But now it is operating way better! Value add is the name of the game. Worst property on the best block!
Rental Property Investor · Honolulu, HI · Member since 2018 · 335 posts · 251 votes
7y
@Joel Florek Thanks! Thats some really great insight, and also kind of what I'm hearing more and more. Would you be willing to share what your numbers are? If not I could just message you. I'm trying to see what kind of returns I could expect after getting a great deal in an A/B neighborhood.