Posted by Jen on July 09, 2002 at 15:51:51:
From looking around the surrounding already gentrified areas I’ve seen comparable properties at 289 or so. Do you think it’s worth it to try to negotiate a lower price or get a good lease option? This is in the San Fernando Valley, btw.Thanks!
Please Help Me! - Posted by Jen
Posted by Jen on July 09, 2002 at 02:21:20:
I’m new to RE and currently studying Carleton’s course. I haven’t finished it yet but I got so excited I started looking at ads and talking to people about two weeks ago (I am still in the 30 day trial period).
This is my issue. I came across a recently built BEAUTIFUL complex of townhomes. I have good friends who moved in two months ago (they are renting) and they tell me that with the exception of one other townhome the rest of the complex is empty. Seems the complex is almost too ritzy for the area, or poor marketing, whatever reason they can’t fill the homes. It is close to a hospital and schools and the freeway. The neighborhood is lower middle class with mostly renters in less ritzy apartment buildings.
I am a first time buyer with no cash, potential partners, and ok credit. I’m thinking it would be relatively easy to get them to come down from the 330k (3bd/3.5bth 2,000sqft) due to the vacancy rate. At the very least get a lease option. But I am so green, I don’t know if there is something I am missing. There is a investment club meeting in my area coming up in a week or so (it would be my first) but I want to know if I should act now. I think it would be very easy to rent this out but I read somewhere here that townhome complexes with a lot of renters are not as desirable. Any advice you guys have will be greatly appreciated. Also, please forgive the length of the post. 
Jen
Re: Please Help Me! - Posted by Space Available
Posted by Space Available on July 09, 2002 at 13:04:00:
Sounds like you are looking at a classic situation - the most expensive home on the block. These units are empty because people who have $300,000+ to spend on housing want a $300,000+ neighborhood. Any appreciation of these units will be retarded by the surrounding area and you will have rental competition from investors with lower cost housing to offer.
I would keep an eye on the area to see if there is any further gentrification/upgrading. Those with the most to gain are the owners of the other - lower cost - homes in the area. I would be looking for investment opportunities in the lower priced, lower middle class housing in the surrounding neighborhood. Values of these homes will be pushed higher simply by their location.