All Forum Posts by: Brian Caulfield

Hi @Brian Caulfield I don't think investing in rougher areas is a bad idea as long as you are aware of the risks and make sure you plan ahead for when problems arise. If you're worried about the tenants and what they could do to the property, maybe consider Section 8. You still get to choose your tenant and having them go through your screening process but since they are apart of Housing Choice Voucher (HVC) they have have to meet certain expectations and responsibilities in order to be and stay in the program and most people don't want to lose their voucher. Plus it's guaranteed rent from the city.

@Brian Caulfield - Proceed with caution. Properties in bad areas always look sexier from a return standpoint but you will be making up the additional return with your time managing the property. Properties in D class areas have tenant bases with more personal issues such as jail, not being able to keep jobs, bad credit, and evictions. Yes, on paper the returns look better but I guarentee you are undershooting vacancy, repairs and capex as a result of this rougher tenant base. I personally would rather own in a nicer area, have more reliable and consistent tenants, and take a 2-3% lower cash on cash return. 

One of my best deals from a price per unit was in a bad area.... this one property takes more time than most of my portfolio to manage hence following the numbers without looking at the property holistically was a mistake on my part. 

@Brian Caulfield Are you close enough to the property that you can be there at a moments notice? I’ve heard managing a D class property is a full time job. Not very passive at all. I’m a long distance investor and won’t touch them for that reason.

I have a daughter who lives in Philadelphia and not in Rittenhouse Square. 

Block by block it varies. Go lookup tranq and Kensington. 

You need security and you will be replacing it as it gets stolen. Where are you getting your market rent numbers from? Can be done if you live nearby. What is your personal background? Go there at night and see how you feel. 

Tenants: working class, punk musicians, artists, some college areas but these tenants need more personal attention and cash rents. "Screening abilities" would not be on my top ten bullet points needed to be successful. 

@Brian Caulfield

I am currently working with a client and am processing 3 BRRRRs in NJ currently.  One thing I've noticed over the past year or so, the "better" deals tend to be purchased in the $400k-500k range with ARVs between $750k-950k.  I've closed a few a little under those ranges, but most have been more pricey properties.  Most of my NJ clients are selling, not holding.

Cheers!