All Forum Posts by: Allen Wu

Hi @Jeffrey Weiss,

This is a question I answer often for my clients, as it's definitely a valid concern from an external perspective when investing in smaller Florida cities apart from the metros. One thing to note is that for all of these coastal towns, tourism and hospitality industries are always going to be some of the top supporters for these areas. Different areas may have varying degrees of support, but in Cape Coral specifically, this is a very large component of the local economy

In addition to that, with the older population, healthcare is also a huge necessity and a large economic driver in Cape Coral as well. Construction and remodeling is another industry that is not showing any signs of slowing in the near future with larger developers heavily invested such as Pulte Homes, D.R. Horton, and Lennar

Another thing to note about Cape Coral is that although the variety of job opportunities available directly in the city is limited, the drive to larger nearby cities such as Fort Myers, Naples, and North into Punta Gorda is often less than 30 minutes. Cape Coral offers housing in hard to find price points and with unique amenities not available in these other areas, so growth, employment opportunities, and diversified industries in these larger cities also highly benefit both the purchase and rental demand in Cape Coral 

Hi Michael,

Sure thing! Happy to help a fellow New Englander; I'm from Maine. I'll PM you for you email address so you can receive the monthly reports.

Hi Folks,

I've heard investing in the inner city and low income/high crime areas is horrible, but I'm here to ask either how you've made it work to be successful, or exactly what kind of nightmare you've had?

I've been considering trying to BRRRR in the inner city in several cities in the Midwest (KCM, STL, MKE, CLE) and I live out of state. I've spoken to many local very experienced and saavy agents/PMs who caution against it due to to the amount of headache involved with low income areas and the crime, dangers and risk that come along with it. Specifically that good PMs will refuse to manage rentals in the inner city, and contractors will refuse to bid your job.

While this is excellent and sound advice, can anyone share if this has happened to you or you've found a way around it, and offer any additional reasons/showstoppers that make this a bad strategy - or offer how investing in low income areas have been a home run for you?

 If I were willing to give it a shot anyways and learn from experience, I'm wondering what other huge negatives there may be that I haven't discovered thus far and how likely I'd be to recover from my mistakes. Clearly I'm pretty risk tolerant and hoping I can make it pay off - posting here to gain your collective wisdom!

Thanks!

Hector, I'll give you some opposite advise than what most on this site are providing. I grew up in the midwest; heavily invested there; lived in CA past 22 years. Mom/Pops have missed the out of state investor bull market; it's too late unless you see low returns in tertiary cities. If you want a decent SFR , you're talking $300K-$350K; based on rents/taxes and the likes you may eek out a 2% ROI; don't expect much appreciation the next 5 years if any; it's appreciated to the point where it's not affordable to the middle/ upper middle income classes in the midwest... whether to buy or rent.. Note: from a "buy" standpoint, unless you are all cash/heavy down payment, today's interest rates for investors in the 6%+ range don't cut it. I recommend building up your cash and see what happens the next 9 months in the market. Markets like Indianapolis: state of IN has a 2% tax rate and investors get no homestead exemption; That means on a $350,000 home you're paying assessed value tax around $6000/year or $500/month; Add $200/month what you should figure as short & long term capital repairs; $175/month MGMT: $75/month lease fee assuming tenant stays 2 years; $25/month HOA minimum, 1 month loss of rent assuming vacancy during turnover every 2 years = $80, and you are at $1055/month: This is based on a nice neighborhood/class A/B in indy Suburbs; On a 4/2 1/2 SFR you'll pull $2000-2100/month rent, so you're left with $1000 to cover your P&I and profit. Now assume you buy $350K home; put $25% down and take loan at 6 3/8 on $262,000; Your payment is $1630/month or you're losing about $600/month all things being equal. So, there's a real world example; Now you can consider Detroit or Class C/D investing, but do you have the stomach for it based on the returns? I don't know. But don't be in the FOMO mode; there will always be opportunity. You've just missed it in this RE cycle in my opinion and would be better or waiting. This is what MOST people on this site won't tell you.

 @Robert Reynolds I’m moving to LA for a job and I’m new to California market and I am looking to buy my first property and house hacking to get started with RE investing. Would you mind sharing your advice where to get started in California ~ of course within my budget 450k-500k? Any advices would be very grateful. 

Hi, my name is Hector and I decided to get into the Real Estate world last year. I live in Lancaster, CA and own a single family home rental. I have been a lurker on these forums and soaked up a lot of knowledge so thank you all.

I have been considering investing out of state and I was curious where other investors in California were investing in. 

I would also appreciate if you could shed knowldege on a newbie as to how you determine if a certain market is desireable. Thanks again for all the help.

There's a neighborhood that I love, and I already own a house there (my primary residence). It's awesome for quite a few reasons. 

Part of that being that the houses are quite cheap, but surrounded by much more expensive homes. I have a strong feeling that the neighborhood is going to do very well in the future.

A possible downside is that the own-rent ratio is skewed heavily toward owners. It's about 90% own vs 10% rent. Also, rents would be pretty high for the properties here. We're talking big SFHs with yards, not compact townhouses.

Would I be at a disadvantage buying this property and trying to find renters? There are a ton of good reasons for renters to want to live here, but it seems like most who can afford to rent just buy a house instead.

I am curious to see why you like one or the others and everyone's thoughts?