Investing in Class D Markets

[Michael Bennett]

I am a new investor in the Tulsa, Oklahoma Market and I have been studying real estate for about 6 months now. My first investment was a partnership on a flip project. We are about two weeks away from completing the renovations and listing the property for sale. Currently I am in the midst of acquiring two rental properties in a Class D+/C- neighborhood. My mentor is assisting me with the acquisitions. He has been in real estate for over 12 years and primarily invests in this area of the town. He has over 50 rental properties and has extensive knowledge within this particular market. He is prepping the properties so that they are turn-key for me and he will even assist me in finding my first renters. I am comfortable with the neighborhood because I grew up in this area of town so I am familiar with the neighborhood and I know what I am getting myself into. He will be selling the properties to me for about 35k each and they will rent for anywhere from $600 to $800 a month on a 12-15 year note with the bank. With his knowledge and history in this market I feel that my mentor is steering me on the right direction and not setting me up for failure. But he is benefiting from the deal so he could be out for himself in the long run. I’ve been taught not too much trust in investors these days unless you really know them. On the flip side of that I don’t believe in failure and I refuse to fail but at the end of the day I don’t know what I don’t know. As a first time rental owner I was wondering is there any advice for me for investing in this type of neighborhood and dealing with these types of tenants. I know i could invest in a Class B neighborhood but I would have to purchase the house from another investor and I would feel like I’m turning my back on my mentor. He is the one that connected me with his banker who approved me for the loans plus everything else he is doing for me. I’m grateful for the opportunity that he is giving me and I really don’t want to go against the grain with this opportunity. Any advice will help! Thank you!