All Forum Posts by: Ryan King

Thanks @Mark Byers.  I agree, those are all realistic possibilities with the location & age of the properties in this neighborhood.  The vacancy and theft is what worries me the most.  The Home has new plumbing, new electrical and I purchased a protection plan for the cast iron sewer line and incoming water line, so I should be covered on that front.  

@Mark Byers do you manage any properties in this area?

Thanks for the insight @Melissa Nash.  I agree with your logic on section 8. The current tenant is paying $1,100 per month, which is well above market rents in the area.  I recently closed on the property and already collected July rent.  My PM has done a great job with the transition so far.  I too hope that my tenants stay forever.  

Cash on cash is about 20% AFTER accounting for hefty vacancy & repairs. 13.7% cap rate. I suppose high risk yields high reward...

@Melissa Nash How do you deal with vacancy in these areas?  If you have a vacancy in a rough area, how do you limit theft of mechanicals (AC unit etc.)?  Any strategies on how to limit the vacancy term and deter theft while the property is vacant?  I've heard of some landlords installing security cameras, but I'm not sure how scalable that is with multiple properties.  
 

Hey Everyone.  I am looking for more information on the Inglenook neighborhood, located south of Tarrant. I understand that this area is pretty rough (D/F).  The number of vacant homes and crime in the area can be concerning to investors looking for cash flow. The declining schools are also a concern. 

I have the opportunity to purchase an occupied SFR in this neighborhood with VERY healthy cash flow. Y1 Cash-on-cash return near 20% after accounting for vacancy, repairs & PM. I am fully aware that the property I am interested in purchasing will not appreciate much (if any) over time. My goal as an investor is to achieve cashflow. I am okay taking appreciation out of the equation for this purchase.

I understand that placing qualified tenants will be difficult in this area. The property is currently occupied at $1,100 per month with a tenant who has paid on time, so I am not too concerned with the initial lease up (I know, $1,100 is insane for this area). The property was recently gutted with all new mechanicals, so I am not anticipating a ton of repairs or maintenance. 

At what point should I turn a blind eye to negative aspects of the neighborhood?  All I am seeing is the healthy cash flow on a property that should have low cost to maintain.    I would love to think that this area will be gentrified in the next 10 years, similar to East Lake & Irondale.  Any insight from locals who know this area well is appreciated!  BOTTOM LINE- Are the neighborhood risks worth the extremely healthy cashflow?