Most Of Neighborhood Owned By One Person - Should I Buy There?

[Matthew B.]

I have the opportunity to buy a duplex in a neighborhood where 90% of the other properties are owned by the same landlord. Their properties are ok for now, but my concern is that this landlord could get lazy with upkeep/screening or could sell the portfolio to a slumlord and the neighborhood could go downhill quickly. 

Has anyone dealt with this before? Would you buy there?

[Joe Splitrock]

Originally posted by @Matthew B.:

I have the opportunity to buy a duplex in a neighborhood where 90% of the other properties are owned by the same landlord. Their properties are ok for now, but my concern is that this landlord could get lazy with upkeep/screening or could sell the portfolio to a slumlord and the neighborhood could go downhill quickly. 

Has anyone dealt with this before? Would you buy there?

 You could also argue since they own 90% of the properties that they have MORE incentive to keep up the area. 

[Todd Rasmussen]

@Matthew B.

I agree that the knife cuts both ways.

Your biggest potential loss is the opportunity cost of not building a relationship with this person. Your best case scenario is that their properties start to slip and creates an opportunity for you to purchase on volume. Meet this person and check in 4x a year.

[Dave Van Horn]

@Matthew B. I would be less concerned with one person owning these rentals and more concerned with the fact that 90% of the other properties in the neighborhood are in fact rentals, since this could impact a few things for you.

You'll see what I mean in condo associations for example. Fannie May requires 51% of the condos to be owner occupied since it can affect the property values, conditions, appraisals, and even effect the terms of your financing. HUD could be similar as well.

Not saying this always happens in a regular residential neighborhood but it could be a sign of declining values on the horizon. Something to be mindful of.