Blog Post: Why I’d Discourage Newbies From Buying D-Class

[Alex Sanfilippo]

I just finished reading "Why I’d STRONGLY Discourage Newbies From Buying D-Class Investment Properties" Click here to read it. (Don't worry, it's a short one.)

This is something that I was considering doing as I have been writing up my investment / business plan for my future in REI. I'm new and still learning, gaining some knowledge and guidance from people in this community, so I'm not 'set in my ways' or anything! I'm just here to learn.

Any locals to Jacksonville, Florida that can share some success stores or some warnings about investing in some D-class areas?

I'm looking forward to hearing back!

[Rick Baggenstoss]

@Alex Sanfilippo  Please take comments from people as guidance not as a rule.  You've heard from some experts and their experience is something to take to heart.

You need to weigh the higher level of intensity of a D-Class property with higher income and but also heavily weigh the dynamics of your location.  In my area, had you purchased sub-$100k  "D" houses available in certain neighborhoods 10 yrs ago, your property value would be 3 - 4 times that amount today.  You would have dealt with a low-income tenant, older house, and increasing property taxes.  That would not suck.

You can also find examples in Atlanta where D properties a decade ago are still D properties today.  Figure out where and how fast things are changing.  Buy B - D houses on the edge of this.  

Jax is one of the fastest growing cities in the country.  Don't get fooled into thinking a D-property is stagnant.  

Build a portfolio (like stock portfolio strategy) that balances risk, growth, and income.