Downtown / Bad Area - Rent or Flip or Run?

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Any area that has low end houses at around 8k probably has better houses in better areas for 20k-40k. Once you factor in what you'd have to spend on fixing the 8k house you might find you're better off looking in the somewhat higher price range. Less work needed, somewhat more rent (probably), somewhat better class of tenant (probably - but don't assume that any sec 8 tenant is a bad tenant, that's just not true) and more chance that someone else will want to buy the place should you decide to sell.This is assuming you are looking at rentals. If you're flipping, you're probably wasting your time looking in these lower end neighborhoods. There's likely not enough spread between what you can buy for and what you can sell for.

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It very much depends on your personal risk-threshold and definition of 'high crime'. For some people 'high crime' is when there's an occasional drug deal going on, for others it's 'drug deals on every corner'. The definition is usually depending on what you know and are used to living. I personally have been investing in what some people consider 'high crime' neighborhood. Yes, there are crack deals, yes, there are prostitutes, and yes, there are pockets that I avoid. Overall, I don't regret it. I cash flow nicely and I've learned a lot. But I also lived in one of my houses for 1.5 years. White, blonde, with red convertible, walking and driving all over in a 99% low income black neighborhood. While I've had the occasional person spit on the street in front of me or yelling at me to go back to my own neighborhood, I have learned that most residents are pretty decent people, who try to live their life in the best way they can. And most respected me. Would I have done it, if there wasn't potential icing on the cake waiting? Maybe not, since I don't want to hold forever. My area is close to a particular city venture that will make a bid difference in the next 5-10 years. So, take a look at the neighborhood that you have. Is there something that you might see coming up in the future that might change the neighborhood? Do you have enough cash to buy more than 1 property? If you buy maybe 3 on one block, you can potentially change the block. Other, more timid, investors will follow and buy between your homes. Or get a few investors together and buy a bunch of homes at the same time. You might be able to change things. Nobody then has to do it alone. Usually properties around 10K are stripped of anything valuable: plumbing, wiring (walls torn open for that), heating system, water heater, kitchen cabinets. In those neighborhoods you'll want to have a wireless alarm system, or they will tear out overnight anything that you've put in during the day.

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Thanks Anthony,Our group did quite a bit of volume in KC in 2013 and we found our niche market to be South of 50th street.The area starts to get better and better the further South you go. I would consider Ruskin and Raytown to be very decent buy and hold area in the current climate. I also believe they have potential for future growth as they both where once predominantly owner occupied.Its is vital to have a unique property manager to cater for the these lower class investment in order for the numbers to work.Without the right PM it is very difficult to succeed.Thanks and have a great day.

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The main thing is that even in KCK and KCMO, the inner city has it's good and bad neighborhoods. One block might be safe, clean, and filled with hard working people, while less than a mile away the area is a war zone. I am originally from Kansas City, and I would avoid certain areas of both cities if I was to invest. If while watching the news, you constantly are hearing the same street name where murders and shootings take place (Prospect, Troost, Quindaro, etc.) avoid that area like the plague.

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It takes a special type of person ( alligator skin, accustomed to rent court) to do business in these areas. If someone has the stones for it, however, the returns are quite remarkable. Such business isn't for the off premise landlord, however.

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@Mark Breaux I've just never seen where these low price houses work. They're $8K for a reason and that's because they are in very rough areas. Don't assume that because it's so cheap, you can always sell it for more. Some properties are virtually unmarketable.

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congratulations.

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@Mike D'Arrigo Thanks! That is the general consensus.

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@Anthony G. Yea all of these are that area. I googled the intersections. Lots of murders!