Hi All,
I have located a property that presents a very strong CoC ROI of 19.46% using a 17% vacancy rate, and a very high CapEx amount. The property was built in 1950 and is a total of 5 units being rented out currently for $850/$850/$950/$950/$1000.
The neighborhood isn't the best with the average income being $22K-$28K depending on where you look. Local schools aren't great, crime isn't terrible but it isn't somewhere I would walk around at 2 am by myself, and about 60% of the population in this area rents.
Several forum topics talk about the C/C- property renting nightmares, and one of my mentors who owned the building I rented in Philadelphia (average unit value of $400K) is trying to push me away from investing in a lower-end area. I on the other hand am attracted to the higher ROI even though I know it means more work.
This will be the first property I buy on my own, though for what it is worth (which could be nothing) I currently run a business with 60+ employees and deal with people all day long, so the prospect of managing tenants/contractors/money doesn't scare me.
So the question....would you jump into a lower C class property for your first time if your goal is high cash-flowing growth?
