Investing in Multifamily "D" Properties

[Rashad Jones Jennings]

Anybody invest in Class D Apartment buildings? When I talk to other investors most multifamily investors invest in B&C properties. Im curious to hear from someone who is in the D class niche. I was thinking of using the BRRRR strategy with the Class D apartments. Feedback welcome.

[John Warren]

@Rashad Jones Jennings I own a 20 unit that is considered C-. It is not quite a D, but it is definitely border line. I can tell you that they are profitable, but the vacancy factor and more importantly, the economic vacancy, can be very high. They are also extremely hands on from a management perspective. You will definitely want a management company (in my opinion) because managing these types of tenants is like herding cats. No one has bank accounts, no one has cell phones, no one has emails, etc...

I do think these properties can be very, very profitable, but you have to balance the profitability against the amount of time you are spending on it. Most investors flock to B and C class for a reason. I personally am leaning more towards B class because if a property takes away too much of your most valuable resource (time) it may not be worth it in the end.