Anyone doing Section 8 rentals in Petersburg Virginia?

[Patrick Sears]

Hello,

Wondering if anyone in the Central Virginia area was investing in inner-city Petersburg or Hopewell?  Specifically, doing Section 8 in the lower-priced, rougher areas?  I currently have rentals in Richmond (have done Section 8 there inner-ciry), but was thinking of trying out Petersburg.  Richmond is way overheated right now.

Tossing around either Section 8 or maybe doing fix and flip to other investors and I carry the paper.

Thoughts?

[Linda S.]

@Patrick Sears,

We invest in Petersburg, and have gotten a lot of great deals and have some great tenants.    Everyone seems baffled, but for some people it's a desired location,  or they don't mind the 20-30 minute commute!    Personally, I wouldn't do section 8 unless it's an ideal tenant, as in general we just prefer M2M leases.  I wouldn't do a flip there either-- just rentals.

The government/city of Petersburg is a crapshoot-- it's so poorly managed, it's embarrassing.. their fundraisers are embarrassing..... e everything about how the government is ran-- is just a joke. .. gosh even their holiday decorations are embarrassing!   Property taxes are VERY high ($1.35 vs. .80 in Henrico) ..  To do well in Petersburg, you have to really know the streets/areas/reputations, and IMO isn't for a passive investor.   A lot of people get burned just throwing money down there, not realizing they are buying 1 block from a ghetto or section 8 housing complex.    Rents are comparable to the east end ($750-$1000).  It's not an appreciation play IMO, although all of ours have doubled or more in equity.  The people and mindset is different-- people aren't looking for granite, they want nice, cheap rent. 

 I would strongly recommend staying away from the sub $20K category, they're cheap because of deferred maintenance.. sometimes it's a great deal, but majority time it's because a house needs $20-$40K+ work.