Investing in the Inner City - Posted by MikeT_Ca

Posted by IB (NJ) on July 21, 2007 at 22:07:33:

Yeah I expected more from Jimmy. At the least, a response to my question.

Ib

Investing in the Inner City - Posted by MikeT_Ca

Posted by MikeT_Ca on July 17, 2007 at 20:35:45:

Hi,

Is anyone investing in the inner city? Section 8 Houses?

I would like to hear some pro and cons. Get different peoples take on the subject.

Thanks,
Mike

Re: Investing in the Inner City - Posted by BTI

Posted by BTI on July 20, 2007 at 08:17:09:

Mike

It depends on what you mean when you say inner city, that in most minds means war zones. Don’t waste your time in war zones.

My brother and I tried to revitalize neighborhoods that we remembered as kids, where had had friends, and the great feel of those neighborhoods.

We thought we could save the areas, but after several years of making an effort we had to accept the physical structure was worth saving but we couldn’t stop the flood of people who fit the definition of an infestation with no cure. We were trying to hold back the great flood with a couple of buckets.

We went back to our prime investing strategy which we called “Bread and Butter or Better”, and made lots more money with very few headaches. In later years we would drive through the areas and know that our great ambition would have never take hold in our lifetimes.

We once proposed an idea to a Oakland, Ca. city official that we felt would save East Oakland and add much to the city budget and image, but were later told by him that they had discussed it and felt it would upset far too many of the wrong people.

About thirty years later we ran into him at a dinner for an old friend that was retiring, and he told us not fighting for our plan was one of the biggest mistakes of his life, because realized over the years what getting it implemented would have done for his city. But I guess some areas, like some in New York for example have to go through a complete cycle which can take a couple hundred years to return.

So remember, unless you have a psychologist on speed dial, or have a slumlord mindset, I suggest you adopt the Bread and Butter or Better mindset, and when the infestation spreads toward an area you have investments in, sell and adjust your classification for the area.

BTI

Low Income Areas - Posted by Jimmy

Posted by Jimmy on July 18, 2007 at 06:17:47:

Investing in LI areas is all I do. hardly inner-city, however. small to medium sized towns. here are a few observations:

  1. there is no such thing as a Section 8 house. there are Section 8 tenants. don’t put yourself in a position where you rely on housing for tenants or for your desired level of rent. you cannot depend on a steady supply of vouchers. make sure your properties are attractive to non subsidized tenants. else u b a welfare case yo’self.

  2. vacancy can be a real problem in LI areas. all it takes is a house full of crackheads across the street, and your place empties out. and once vacant, its a sitting duck for vandals and thieves. when evaluating properties, take a look at the entire block. it is very desirable to have elderly folks as neighbors (or better–as tenants). they never leave home, see everything, and tend to take care of their properties.

  3. you’ll get better cash flow in LI areas, which is why I go there. that seems to be a universal truth.

  4. understand that LI means LI. you must keep LI tenants on short leashes. never let them get too far behind, 'cause they cannot catch up. 3-day notices on the 15th and E-papers on the 21st. that’s my rule.

  5. seller-financing properties in LI areas can be a lot of fun (you being the seller). I’ve done it a few times, and I have learned to like my notes more than my properties.

Re: Investing in the Inner City - Posted by michaela-CA

Posted by michaela-CA on July 17, 2007 at 20:42:22:

There is no one market that’s called ‘inner city’.

IC Detroit is different from IC Atlanta is different from IC Seattle

Michaela

Re: Low Income Areas - Posted by IB (NJ)

Posted by IB (NJ) on July 18, 2007 at 13:42:39:

“else u b a welfare case yo’self.”

Is this supposed to be some sort of racist stab against inner city (read ‘Black’) folks Jimmy?

Ib

Re: Low Income Areas - Posted by nhs76

Posted by nhs76 on July 19, 2007 at 20:33:18:

Sure looks like it to me. I respect the knowledge but not the apparent lack of human grace and decency.