Warzone experiences?

[Richard S.]

any one have personal experiences with warzone properties? Im certain 95% of all investors will pass on this "deal"... But also know that shortly someone in the 5% will be coming to buy. Fire damaged house in warzone, bank is almost giving it away @ 15k. Comps are 139k. Reviewing tomorrow to gauge scope needed to repair. Not condemed, no contractors needed... 1) pack up tools daily 2) no copper, pex only 3)never install any appliances till closing (ps take pictures) 4)keep in all low low low end 4)Not a disrable resale 5)limited resale to slumlord, therfore throw away the comps 6)?? just stay away? Personal experiences, thank u...

[Account Closed]

I really dislike the term "warzone." It has a truly negative connotation.

I don't know what a warzone is, but I invest largely in areas where there are shootings and crime. The truth is those are in fact the places where poor live. The poor are largely ostracized because they are in need and they live in undesireable neighborhoods. For me we are talking the West and South sides of Chicago which are famed for their violence. I have seen a lot of terrible things, methlabs, police cordons of places where there are bodies lying in the street (not just around Obamas house *wink*). I have seen condoms and needles, the homeless and wild dogs (in the city no less). I have dealt with gangbangers hanging out in streets, and have bought properties on streets with 8 brand new Cadillacs parked on it. HOWEVER I have bought and sold 50 or so homes in the last 2 years and I have NEVER seen a gun, or have felt or been threatened. I hire only local contractors and interact with the community as much as I can. I have become friends with many pastors in local churches, even working with them on real estate deals, and attend gatherings at local events. One does need to take precautions. In all our flips for example, a construction worker sleeps in the property every night. Dogs are useless to prevent theft - they are usually poisoned very quickly.

There are bad people such as gangsters and drug dealers that are in these neighborhoods. The fact remains that the poor need a place to live too. They have dreams and desires like the rest of us, to own homes, to accrue equity. THere are many that will live lazily on the Section 8 rent but they are to the benefit to us landlords and not to the detriment of anyone else by the government and our national debt.

Furthermore, it is in these neighborhoods that the real deals can be found. Homes in poorer neighborhoods are selling at a bigger discount that those in high income neighborhoods. The people buying homes in these places are real people with jobs that can support a mortgage. I am about to close on a property purchase for a rehab, with the eventual homeowner already with a mortgage lined up for 170k, with comps to support the sale (I bought the piece for 40k, 40k reno). She is a postal worker for 17 years and has already been working with the contractor to pick out tile and other customizations. THe property will cashflow for her as its a 3 flat and we will have the Section 8 tenants in place for her before she closes.

Something also to think about is why there is so much crime in these areas. These are policy questions no doubt but the inexplicably wide wage and income gap could be an issue. Just throwing it out there.

Please don't use the term warzones anymore. Real people live there and don't appreciate it. Not to single you out, but to everyone on the board. Thanks.