Petersburg, VA: Where to Start?

Question

My wife and I own a few properties, all over the world really. But we know we need to focus on a particular area, which is why we started looking at RVA (where my wife is from). We ultimately decided that we're going to BRRRR in Petersburg as it's a big time rental market and it isn't as cash intensive as RVA. We prefer to not use hard money, just a point of preference.

Wanted to get some insight into the community.

We're out of state as my full time job (military) keeps us moving around quite a bit. We self manage, so we feel that BRRRR'ing is the best strategy for us, as we'd prefer to grow our portfolio while rolling out cash into sequential deals. A renovated home (should) mean that there are less maintenance issues.

How is the overall market? Is it difficult to rent? Is it difficult to find great tenants? Are there particular areas we should avoid?

Truly any input would be helpful. Thanks.

Taylor L. · Answer

Petersburg is the lowest income part of the Richmond MSA. The prices are lower because the income level is much lower, schools are poor, and local government is in disarray. If you're looking at properties in Petersburg, keep that in mind. It's not the same as Chesterfield

Jeff Cichocki · Answer

If you're looking for turn-key properties, You shouldn't need HM at all. You should be able to qualify for with either bank financing or alternative funding options.RVA is a good solid market. I've got two really good friends who you may want to contact to buy properties. The first is Ron Phillips. His company provides properties all over the country. I think he did over 800 last year. Here's his FB profile if you want to reach out to him. He's really an amazing guy. You won't regret talking to him. https://www.facebook.com/ron.phillips.3110The second is Moe Matthews. He is in the RVA market. Another amazing guy you'll love to talk to talk to. Here's his FB profile in case you want to reach out to him as well. https://www.facebook.com/mathewsmoeI don't get anything for the referral. These are just really amazing guys that do amazing things with real estate. Feel free to let them know I sent you. It'll help break the ice.Good luck.

Trey Kern · Answer

No, I wouldn't say it's that common. The cost of living is very affordable in Richmond so there is no need to move to Petersburg to have a nice affordable house. Plus, the schools in Petersburg are a joke. Look up their accreditation record, it is not good.I would venture to guess that the majority of the workers you mentioned above live in either South Chesterfield or Colonial Heights.Bottomline, there's a reason Petersburg is so cheap. Take a drive through (in the morning preferably before the neighborhood wakes up if you value your safety) and you will see how bombed out it is. The schools are horrible, the city is bankrupt, it will not be an easy road to recovery.If you like the general area, stick to South Chesterfield. The schools are miles better and it is still very affordable there.

Jeff Cichocki · Answer

Unfortunately, the part about Moe going to jail for fraud is true. Turns out that you never really know anyone as well as you think you do and I rescind my comments on Moe being a good guy. Truly sad that he felt he needed to lie to the govt. to get funds from the PPP and EIDL programs.

Conor McFarland · Answer

Moe Mathews was recently sentenced to prison time for fraud.

Daniel Alvarez · Answer

@Taylor L. Thanks and absolutely, that’s understood. Do many people work in Richmond and reside in Petersburg, for the lower cost of living? I see there’s higher education schools (students), an Amazon warehouse (local jobs), Fort Lee (with 10k active personnel), and wonder if it’s a dormitory also for Richmond jobs, with a decent 30’ commute. I see also unemployment in the town itself was at 5% before COVID. I was just hoping to gain some insight about the areas in town where I might want to focus on.

Daniel Alvarez · Answer

@Mark Pijanowski Hi Mark, mine and my wife’s interest got piqued recently with Petersburg, VA as an alternative to Richmond for multifamilies. We accidentally came across a property and became quite curious about the area. It’s just south of Chesterfield Co, which my wife is familiar with, but Colonial Heights and Petersburg are unknown to us. On paper we can see the potential. Oddly high property taxes relative to market values is a interesting occurrence. Are you able to share where you got to and any tips on subzones within the area for multifamily rentals?

Mark Pijanowski · Answer

Thanks for your responses. We were looking at buying a fixer-upper in order to force appreciation and refinance out into another deal. This was the reason for HM. As for the market, we are simply trying to learn more from people who operate within it. Thanks for your insight.

Ron Phillips · Answer

And Jeff is right, you shouldn't need HM and there are excellent loan products in the market right now.

Ron Phillips · Answer

Thank you, Jeff! Happy to help, Mark!