Where is the "super team?"

Question

So a problem that I have been noticing and I'm not sure if this is true in all markets but if a lot of people have a hard time buying in bad neighborhoods c or d class neighborhoods then the suggestion is to buy a run down or bad looking house in a good neighborhood so it could cash flow or it could be sold at a decent amount for profit. I submit to you where is the super team that is able to come in and on a block of 15 or 20 houses that's in a bad neighborhood that has a lot of crime that is known for either shootings or drugs or whatever and a group of 5 or 10 people are able to come into that area and work out a deal so the whole block is able to be negotiated with to help those people out get them out of a bad neighborhood or work out some sort of deal where their house is bought and fixed up and then protected by working with the local police department or the government in some way shape or form to systemically one by one block by block in one market or another could potentially be a better investment area so the end goal is Be able to get rid of crime for 1 to bring up the housing market in that specific area 3 have more of an economic standpoint on those houses to bring more jobs to people to get those houses taken care of and renovated and then maybe it's as simple as once the houses are bought those same people might have a potential of moving back in them if they can afford it to have a nice updated or new house or it could just be a rental and so it could potentially work out for everybody so where is this super team of investors that works together on one city block or one city area piece by piece. Overall the big picture that I'm looking at wood help everybody out? forgive me for my opportunistic and naive point of view but if I don't ask I don't know I'd love to hear people's opinions know about this.

Lynnette E. · Answer

dUnfortunately the druggies and gang bangers do travel and a block that it fixed up will belong to one of the gangs.  ITs turf.  Just because people have moved out of the block to fix it does not mean that the gang gave up their territory.  Cops are too busy to do much about your fixed up block.  They will be in the next block over dealing with the drive by shooting that killed a 6 year old, and will come to your block when something bad happens, not to keep it nice.

Good, B/C Class people will not want to move into the old ratty neighborhood because it still has the same schools and neighbors a block over that they do not have to live with.

The D/F class tenants really do not know how to keep something nice. They like nice things, but will not prioritize keeping it nice.   They are happy living with outside clutter, etc.

As an example, my first house was a row home in Upper Darby PA. The neighborhood was a C when I bought, lots of elderly Polish ladies.  But the neighborhood was changing as they died off and West Philly was moving across the creek into this area, and their war zone mentality was coming with them.  I decided it was time to move.

The lady that bought it really loved 2 things-the kitchen I re did and put in with a snack bar and the terraced front yard with flowers, lots of bulbs,  burning bushes, fruitless pear tree, etc.  A year later I drove by, every terraced level was full of weeds.  The flowers and bulbs were fighting to live, the tree was snapped off at the 3 foot high mark, the bushes were chopped down.  Her son was outside with a machette cutting everything with it in full swing, not caring what it cut, weed or plant.  Although she loved the terraced planters, they did not want to put the time into them to keep them up.  A year later they were weed beds.

I fixed that house up from being a HUD repo in 1989 and sold it in 1994.  Lived in it plus made $8k, which was a lot back then.  The house has since been repainted, it was all white when I sold it and has been worn well, but everything we put in seems to still be there, including the snack bar and terraced yard.  This listing has recent photos : https://www.redfin.com/PA/Uppe...

It is the second house from the end.  But it is now a war zone trashed house.  The only thing they did that would have been maintenance was paint the bedrooms and living/dining room.  The rest was destructive, breaking the entry door in half, breaking out tiles in the bath, no real maintenance was done at all...and its been 25 years.  Same old carpet, etc.  The people who will live in this type of neighborhood do not know who to take care of a house, nor is it a priority.

People in war zones, do not care much about keeping the condition of the property up, survival each day  is the goal.

Bill Kramer · Answer

@Matthew Koch

Sadly, the hoodrats gotta live somewhere. You will never take them out of the tenant pool.

As a contractor I participated in a 3 block renewal, and watched it backfire. They just have a relative or a child put it all in there name and move right back in. Its sickening to watch a client hemorrhage money, but it happens.

You have to be crazy selective in the areas you do this in. Fringe neighborhoods are one thing, but no one is gonna cleanup methville.

Alexander Felice · Answer

love the idealism, but the ground logistics are incredibly difficult. If there was a profitable way to do this, it would happen all the time.

First, you have to get a neighborhood to sell you all their properties

and you have to buy a big enough block to make a dent in the local culture

you have to have all the residents actually pick up and leave the area (and really, where are they going to go?) so you can get teams in there to rehab/rebuild

then you have to overcome the public stigma of said area to get actual tenants or buyers to pay for these houses

and when all that is done, you have to show a profit....

From a capitalist perspective, this is a money loser

from a philanthropic perspective, there are more efficient ways to help

and when the government gets involved and it's called gentrification

Lynnette E. · Answer

Your goals and your vision for you life is yours and yours alone to direct.

We need Mother Theresas in this world.  As you can tell from the comments, most of us do not want to be the Mother Theresa.  We want to be the paid RN or the paid doctor.  Personally I do not desire to invest my life, my energy, my money into something that is a 'mission' without financial benefit.  I am not there.

But I do wish you the best in what you choose to do with your life.

Matthew Koch · Answer

One thing that I can say in one thing that I do know in regards to my strong why to even listen to these podcasts and learn anything and everything about real estate is the same reason behind the idea for the opportunity zone. I want to be in a position that allows me to make my carbon footprint on this Earth as huge as possible however environmentally friendly as possible be able to help people 2 mm true that 20% of the bad that is out there in those neighborhoods that has to be a niche market to allow for the 80% to thrive and grow and improve for a market on any level on any Street in any City or for any part of the country at least that's my somewhat naive opportunistic ideas and I cannot be the only one that shares that idea or vision.

Matthew Koch · Answer

well I have to admit that I'm definitely proud of myself for when I started this post in regards to what I was trying to talk about and convey is exactly the same type of concept that has been mentioned and talked about on episode 337 for the BiggerPocketst real estate podcast side of things. it absolutely blows my mind in regards to the theme in all the books that I've heard mentioned on the podcast and all the people that have been interviewed the very simple thing in life in regards to making it better for yourself and for those around you is simply the theme of giving. It can start on a small micro scale and something as simple as a smile that can turn somebody else's attitude or day around can affect other people in various ways. a relationship can get better if a little time and a little more effort is spent on improving that father to mother relationship child to parent relationship for spousal relationship just giving a little more time of yourself giving of your efforts and of course the monetary aspect of it also applies in a little bit that you can afford to give back to those who need it will eventually come back to you not to be expected but to know that it is the good and the right thing to do. this episode 337 talks about the micro movements of an opportunity zone that starts with the people that are in a medium marginal area that have money that are not the government set shoes to focus their efforts in one particular spot to revitalize places and homes in one market to the next and they get a reward for it from the government that is considered that opportunity zone that is what this episode is talking about. The entire premise is based on the simple fact that a little effort concentrated on one particular area such as people coming together and helping each other out can significantly affect the rest of the market and the rest of the other people which helps with prices which helps with attitudes which helps with other places to go despite the crime despite the drugs despite the gangs and the turf wars there is hope and there is an answer that would allow everyone to thrive when this opportunity cost type of procedure is implemented.

Bill Kramer · Answer

If your wanting to do second chance housing, that's fine. But you gotta be realistic.

My longest client had 120 houses in war zones. Old, broken down homes. She prided herself as a last resort for people. Took in criminals straight out of jail, sex offenders, people with 15 evictions, etc...

We used 1/4" luan to patch holes, spray painted everything off white, floors got painted black, kitchen/bath got roll vinyl, no central air (which meant 1 window per room had to function [and that's all the windows that functioned]), busted kitchen cabinetry got boarded over and so on. Cheap, cheap, cheap. Because they're just gonna tear it up anyways.

She never evicted, but once they stopped paying repairs happened much slower and people would self vacate.

It can be done, but you cant get  fancy either.

Lynnette E. · Answer

When you look at numbers overall you will find that if you buy property in a small rural community you can fix it once and they will appreciate having a nice rental and stay a while. The rent won't be high, but neither are your costs.   In the war zones you will have lots of rehab costs, but may get more in rent due to government funds, but you will plow that money back into the house to keep it rentable.

Some people make a killing in the war zone markets, but before you go into that market, try walking the streets and seeing how you feel and if that is the client you want to work with.

Matthew Koch · Answer

It is certainly unfortunate that those types of things happen to somebody's asset that they paid good money for to try to help a person out and get them in their place. I can also look at it from that survival perspective that you had talked about which translates to me they still need a place to live so if they have a chance to move into these rental properties and the finishes inside are built for a war zone type of situation although cheap materials maybe that would be the answer for the insides to be made almost literally bulletproof so no matter what goes on in the home the turnover might be fairly low if and when they do happen to move out so that alone would cut down on the costs and if those neighborhoods can be section 8 housing then part of the assets already protected by the government and that individual even though they may not be able to pay rent on time perhaps the turnover or vacancy rate wouldn't be as much or as high. Yes I am still new to this and I am definitely learning but I'll take all the knowledge that I can get so I appreciate the reply. I will definitely keep that in mind and consideration for the expectation of the possibility of having c or d class tenants in ruining the asset that my I might own one day, to focus a little more on The upfront cost in trying to tenant proof the inside as best as possible.

Matthew Koch · Answer

I guess I seen it as a good move to try and help those who need a second chance it better reason to get out of the good and into a better place. My whole goal for being a real estate investor is to be that generous person like some of the big names from the podcasts like Grant cardone, Arron mazzrillo, Matt Faircloth and others I look up to because they're still people no matter their bad choices and they do need a place to go. That's another thing is to ask everyone, where is the niche that caters to those bad people like who have been in jail or murderers or drug dealers?  Not to be seen as the act for what they did but yeah a reason for the houses to be filled or the apts rented working with section 8 housing to maybe cut down on the vacancy rate and keep the people off the street in hopes they take care of the property and or able to pay the rent in the first place. The point is I get the business side of it that it hurts a bottom dollar amount to help these people who are into the bad stuff. That however is the literal point for becoming wealthy financially is to either give to charity for tax benefits being an entrepreneur or give it to the folks who can get a place or rental or some kind of dwelling that gives them a place to go even if it's temporary. If I've learned anything from anyone whom I've listened to on the 312 episodes of the podcasts is that when you get to a financial position of strength then money is not the problem and or a concern if your needs and personal financial house is in order and met then helping others is kind of the goal in the first place or am I missing something? It's solving a problem that benefits everyone no matter that poor person decision on how they choose to live or spend their money or ruin and wreck their chances of being In a nice home.....

None the less thanks for the reply and wish you the best in your realestate journey!

Where is the "super team?"

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