[Calc Review] Help me analyze this deal

[Viktor Mironov]

Hello everyone, 

I am brand new to RE investing. Still trying to get my foot in the door. As I am reading and expanding my knowledge, I am running the numbers on a few deals per day. I came across this little deal here. It is a little snippet of a property I saw for sale. Asking price is $150k but the only way the numbers make sense to me is at 50k. The two properties look like they need some work done to them. I drove the area on Monday and it is in the ghetto. However, the area is undergoing major gentrification and all homes built around this particular neighborhood start at $300k plus. I am thinking within the next 5-10 years, the entire area will be completely gentrified which will force all the lower class home owners and renters to move out. It's biking distance from downtown and the city's nightlife. Please advise if investing in such an area is a good idea. Thank you to everyone in advance. 

[Robert Leonard]

@Viktor Mironov Welcome to BP and starting your real estate investing journey!

Although no one can specifically tell you if this is the right investment for you, I'll provide how I would personally approach it.

At the peak of a cycle like we're at now, I personally wouldn't pursue this property/area. If we were just coming out of a recession, it would be far more appealing to me. This is more of a speculative investment, of which I am not interested at this point in the market cycle.

Robert Leonard

[Viktor Mironov]

Thank you for your input.

[Dennis M.]

Yeah everyone thinks their area is gentrifying lol look it’s in the ghetto and it’s 150k that’s all we need to hear to know the deal probably is bad .