Rehabbing & House Flipping
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated over 12 years ago, 05/29/2012
Warzone experiences?
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...
Terri, enjoyed your post, gave you a vote.
Having worked a job for 20 yrs has allowed me to not have to pull money out of property to live, so can't judge those that need immediate income and can't afford much in the way of upgrades. My goal has always been to be in a position that allows one to have a philosophy like yours.
Michael, like Terri, I like what you are doing and your kind of operation. Just wish your investment area wasn't 2500 miles away.
Jeff, my operation can be repeated in any number of cities across the country. I am not familiar with markets close to your home but to make real estate work again for me I had to find a market that suited my needs and would support the level of investment that I could afford to make.
Originally posted by Terri Pour-Rastegar:
I currently do buy in a neighborhood that some people consider a warzone. It's not like that anymore, but most people don't know that. I'm the only white girl I've seen there in the 4 years I've worked in this neighborhood, and the neighbors love me. Because I do right by their neighborhood, and I put good tenants in place. My new tenants are always people who have lived in that neighborhood before and want to come back now that it's safe.
Warzone = Danger. That's that.
Mostly I buy and hold. I acquire my properties myself, manage the rehab, screen the tenants and manage the properties til death do us part. If an area is known to be criminally dangerous, I want no part of it. All the money in the world will do me no good if I've been mugged, raped or killed while at one of my properties. I should not need to pack heat or bring along a really big guy to protect me.
Being a slumlord is never an "out" for me. No matter how financially poor a neighborhood might be, I will rehab my rental to the nines, just like all my properties.
Why buy in a warzone anyway? There are great deals in all neighborhoods. I'll pay a few thousand more to be safe--and to help keep my tenant families safe, thank you.
I have bought warzone properties, but I quickly wholesale them to more adventurous, less choosy investors.
I understand what you're saying completely. But, Danger doesn't have to be in areas you wouldn't live. I don't see those going hand in hand.
The reason people would invest in war zone is it is a low entry, high potential CoC, and gives them a chance to get their feet wet.
My experience in the region I invest is this. You can basically divide the region into one of three types of areas:
1.) Warzone - This is where the bulk of the crime is. In my situation the closer you get to the center of downtown the higher the crime rate and the more likely I would classify an area as a warzone.
2.) Transitional area/Working Class area - This is the transition area between warzones and the suburbs. The closer you get to the warzone area the lower the cost of housing and higher the risk. The closer you get to suburbs the higher the cost of housing and lower risk.
3.) Suburbs - Middle/Upper class neighborhoods. These are the furthest from city center. Low crime rates, better schools etc.
My bread and butter is in the transitional areas, but you have to be careful. It is much more likely that a "working class area" can quickly become a "warzone" the closer it is to the city center.
As an investor though I feel like I can make a difference in that regard and I feel like the work I've done with my buy/hold strategy has helped stave off a transitional area becoming a warzone. This is especially the case when I can focus on acquiring several properties in close proximity to each other. It's amazing how much the neighbors will love you because they recognize that the work you're doing also helps their home values and helps to keep crime at bay.
War Zone, that term wasn't created by accident. It reflects reality.
My brother and I had hopes and dreams of bringing back older neighborhoods we were fond of as kids and hoped to turn the tide from deteriorating to improving. One of our first tenants was a Korean War Vet and his comment after living there 6 months was it felt and sounded like he was living in a war zone.
We had heard the term used by others in the past and decided to close out our activities of 3 years in the area and gave our equities to our good tenants. We then adopted the policy of bread and butter or better investing. What a change in our lives.Yes there is money in war zones but it isn't easy money and I would rather make it without earning a purple heart.
We would have liked moving everyone out of the area, then rehabbing, and then let all the decent people back in but of course thats not possible. Our plan to turn the tide was naive, we might as well have tried holding back the Pacific Ocean with a bucket and a sponge.
Brian,
I think you are right... there are areas that can be saved and others that cannot. I am looking at some properties in some very rough areas right now but they are piggybacking on some major redevelopment projects. I don't think the little guy can do it on their own one house at a time... but if there is a major redevelopment money flowing into an area then I think you can still pick up low end properties near the major developments.