Investing in St. Louis high crime rate locality

[Chandrika Vasudevan]

Hi Everyone,

I'm a Rookie out-of-state investor looking to close on two SFH properties in the St. Louis, MO market. We're done with the inspection and the appraisal and the closing date is next week. We're inheriting tenants for both the properties and they seem to have been paying rents regularly.

While I was in the process of looking for a good Property Manager, I came across one PM who mentioned that he is a buyer agent too and that the zipcode that I'm buying my properties on is a very risky and high crime locality and that there are a lot of shootings in that particular location.

With the closing hardly a week away, I'm freaked out unable to make a decision about what to do next since I need to manage these properties remotely. Do I go ahead and close on the deals or do we pull out of it and forego our EMs? What are the consequences of pulling out of a deal this late in the process. Would this affect my future purchases in anyway? Please advice. TIA!

[Royce Moriarty]

@Stephen J Davis Quite a bit of generalizations and assumptions made in your comment. When you take into account the average property price in the original posters area is $925k-$950k it can make it a very difficult location for first time investors to get started. Your 30 min rule may drop that average closer to $600k. Not only is sales price a limiting factor in this area but if you pair it with the average rent to price ratio being less than to 0.5% it is easy to see why a lot of folks from markets similar to Seattle & San Francisco are forced to look in other markets to get started in REI. But that's part of the beauty of RE. Its not a one size fits all!