Low Income B and C neighborhoods and Multifamily Buildings...

[Chinmay J.]

Maybe I just live in a bubble. Most of the people living inside the beltway are living a bubble anyway, and while I technically live outside the beltway, maybe I got sucked into it somehow.  So tell me where I am wrong in my thinking. 

There is a direct co-relation between income levels and one's creditworthiness. I see this all the time where I live, work and hangout. People who have good income (baring unfortunate thing like divorce or medical bills) typically are responsible and have decent credit scores. Even if there is bankruptcy in their past, they tend to show pattern of responsible behavior. These people, if they are renting, are renting because they want to rent. Not because they need to rent.  DC has a high proportion of transient population, so people are coming to DC Metro area all the time for employment reasons. Most of my A+ clients have been non DC natives who moved to DC. 

That brings me to the crux of my question. How do you investors, who own large multi family units in say B or C neighborhood find good tenants to have meaningful occupancy levels. If you have 100 units in your building, I would say 85 to 90% would be a decent occupancy level.  If all your tenants are not A quality tenants, then what would be an ideal mix to make the numbers work. 

Its very hard for me to envision who would be such a person who has low income, good creditworthiness and wants to be a tenant. I have never met such a person in my life. I have met plenty of people who were moderate to low income, had good credit worthiness but most, if not all, had their own house

I don't own any multi family, nor do I have any immediate plans of entering that business, but I do have DREAM of eventually buying one and moving down south.. FLORIDA would be nice ! :-)