Good House - Bad Neighborhood - Good Deal?
I am getting ready to buy my first property. It's a 4-plex - older home that has been completely rehabbed and fully rented Sec 8. Owner says he has a bank appraisal $10,000 over his asking price.
The numbers appear to offer very good cash flow, but I'm concerned because the neighborhood is pretty run down - a few houses have been fixed up, but some are boarded up. I would definitely not feel comfortable going there. Should I pass on a good deal just because of the neighborhood?
Do any of you have properties in bad neighborhoods? Any advise?
Thanks
If you're not comfortable going there, are you o.k.w/ paying for a property manager, and does the property still flow w/ the additional expense?
What is the "pool" of sect-8 and non-sect-8 tenant? if some one moves out, how quickly can you re re-ent?
Have you considered buying all of the properties around in the area that are boarded up as well?
I would first check out all the numbers see what other places in the area are selling for. Just because the current owner has a piece of paper that says 10,000 over what he is asking should not make you jump on it. Do your own home work on the house and the area. There are some very good deals in depressed areas and not all areas stay that way forever. If I was going to buy the property I would want to see the paper work backing up the rents and are they only month to month section 8 <in some areas there are different ways to get rent other then section 8 some areas the county pays the rent and there is also some areas that have rental assistance both of which are only month to month> or are they one year contacts? The last thing I would do is check into a good property manager to run the rentals for you before making any final contracts on it.