Hello From Colorado Springs! Question about Multi-Familys for All The Experts

[Rob Flagg]

Hello Wonderful Bigger Pockets Community!

I have been lurking around BiggerPockets for a decent amount of time now. I was fortunate it enough to sell a successful business late last year and after discovering Real Estate I am excited to put my money to work! I am an avid learner and have been soaking up as much information as possible. I have decided my first purchase is going to be a multi family utilize all of our favorite FHA loan. Once this goes through and I learn first hand I will be moving on to even more!

In my area I have found it's possible to get multifamily places with $200+ monthly cash flow per unit. But I have a huge question for all the experts about my following dilemma.

The city I want to start investing in is heavy military, with three HUGE air force bases the rental market is premiere. As with any city that's sizeable there are good areas and bad areas. At first I started looking for old style cut up houses in nice downtown areas with higher mortgages and higher rents but the cash flow is sub $100/month per unit.

I then started lowering my search to cheaper places, I found a number of multi family (usually 4 plexes) near air force bases that are not the most glamorous place to live. Most of these units are clumped together in sets of 12+ 4-plexes with no HOA means lots of trash around and generally a dumpy area. While it's a dumpy area, and I wouldn't feel comfortable living there at all. While it's a dumpy area, the numbers are there and the consistency is too. The military gives a stipend to personnel to live off base and you can report problem military tenants and swift action will be taken as it's the U.S. governments money.

Most of these dumpy 4-plex's bring in about $200-$250 per unit. After witholding very conservative numbers for vacancy, repairs, capex etc.

My question to every is: would you invest in a place you wouldn't live in but know the money is there? I would prefer to own something downtown but the reality is the cash flow isn't worth it. It makes me nervous investing in a dumpy area and acting as a "slumlord".

Does anyone else have experience with this? I'm excited to hear other opinions on this!

You guys are the best! Thank you in advance for your help :)