Anyone own rentals in the ghetto?

[Shaun Caldwell]

I recently came across a small duplex that is FSBO in a ghetto. I've heard about the strong cash flow properties in low income areas can produce but I'm also aware of the downfalls of investing in not so favorable areas of town. Thoughts?

[Steve Olafson]

I will never buy in a bad location again.  I did a couple of times but the issues were too severe.

My manager was hit over the head with a fire extinguisher after he served a notice to vacate.  Same manager was attacked by a machete wielding person who broke through our large glass window to get at him.  He was a vagrant that did not like being kicked out of the vacant apartment that he had broken into the night before.  The maintenance person found a person dead on his living room floor.  The police came in and took a chainsaw to our kitchen cabinets for some odd reason.  They said they were looking for "stuff". 

On another property I felt a need to drop to the floor when the red shirts started shooting at the blue shirts.  My property was on the news for an ice cream truck driver that was shot to death in our parking lot.  Turns out he was selling drugs.

It took me three months to evict a group that was selling drugs out of their window.  The police told us they could not do anything without proof.  We had lots of proof but no one would accept it coming from us.

That was early in my apartment career.  I only buy in decent to excellent locations now.