Ghetto & Gentrification

[admin]

Ok, here is a real estate post.

Did anyone invest in a sketchy area?

Anorher poster gave me the idea to buy in older buildings near UNLV, in Vegas. I hate old, but I was persuaded by the returns. Kinda like East San Diego or some areas in El Cajon.

One unit 1/1, i have about $25k invested and I’m getting $650 in rent. $130 HOA. Great return and killer buy. Another unit 2/2 i have about $50k invested and I’m getting $850 rent. $130 HOA. Property taxes are negligible, i don’t even remember.

My unit are like Ikea show pieces, so have great tenants. But now I’m on the board of the HOA and I have discovered there are lots of problem people around. That’s because landlords won’t remodel their units and they rent to trashy people. Mostly Whites and Blacks who have substance abuse problem and don’t pay rent. They break into empty units. The Latinos are families who have kids run around and dirty things and mess up the landscape, but they pay their rent. The black and white teenagers are destructive and cause damage.

It’s a lot of work to deal with unsavory characters. I’m trying to get owners to screen their tenants better. But unless they remodel, they won’t get good tenants. Ahhh, I hate old shit.

Edit:
Same people said I’m racist, but those are just demographics of the neighborhood which is very convenient to the university.
In short, I want to gentrify the neighborhood and that has demographic implications of pricing out long term residents.

[HLS]

Discussing tenants by using terms such as
White, Black and Latino is a blatant violation of Federal Law
and if anybody ever heard you utter them, you could get sued and lose everything that you own. Good luck defending yourself.

Now that you are on the board of the HOA, your racism & prejudicial remarks could bring down the entire association.
I hope they have really good insurance.

On March 28, 2014, the U.S. Department of Justice published a notice increasing the civil monetary penalties for violations of the Fair Housing Act. Under the new rule, which applies to violations that occur on or after April 28, 2014, the maximum civil penalty for a first violation has increased from $55,000 to $75,000, and for subsequent violations the new maximum is $150,000.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws

[NotCranky]

I ‘d never own a rental unit I wouldn’t find acceptable to live in myself.

[spdrun]

Seems like FIH hates all of the ethnicities in his complex equally.

As far as other trashy tenants, who cares as long as you’re getting good rent? If anything, they drive down sale prices so you (FIH) can buy more units in the complex. Win.

[PCinSD]

[quote=HLS]Discussing tenants by using terms such as
White, Black and Latino is a blatant violation of Federal Law
and if anybody ever heard you utter them, you could get sued and lose everything that you own. Good luck defending yourself.

Now that you are on the board of the HOA, your racism & prejudicial remarks could bring down the entire association.
I hope they have really good insurance.

On March 28, 2014, the U.S. Department of Justice published a notice increasing the civil monetary penalties for violations of the Fair Housing Act. Under the new rule, which applies to violations that occur on or after April 28, 2014, the maximum civil penalty for a first violation has increased from $55,000 to $75,000, and for subsequent violations the new maximum is $150,000.

http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws%5B/quote%5D

In case you haven’t noticed, FIH has always posted overtly racist comments here. This comment is tame compared to some of his other ones. And, he would never, under any circumstances, consider the rental application of a black or Hispanic prospective tenant.

[spdrun]

Which is funny, because he claims to be out to make money. Moral considerations aside, money is all the same color.

[HLS]

Freedom of speech allows him to say whatever he wants.
However, the slightest hint of discrimination when
it comes to renting/selling property could cost him everything that he owns.

I know he’s an expert in almost everything and would never pay anyone to do anything, so hearing what the judge would say about his
racism would be interesting (especially if it were a ‘Black’ or ‘Latino’ judge) when he represents himself.

[FlyerInHi]

Just observations on the demographics of neighborhood.
Nothing to do when tenant screening. I screen tenants of all kinds very well. BTW, we never talk about any individual resident in terms of race.

The problem many owners are desperate for money and will rent to anyone. And when units are in bad condition, the tenant pool is much smaller.

[FlyerInHi]

[quote=spdrun]Which is funny, because he claims to be out to make money. Moral considerations aside, money is all the same color.[/quote]

I agree, money is green.

That’s why I support immigration reform and a diverse business environment with all kinds of people

The critiria I have are simple. No race involved.
No criminal record
No eviction
Verifiable income by employer via business fax or phone. Copy of paystub not good enough
Move in at beginning of month. No desperate immediate move-in

[millennial]

I have invested in areas such as the one you mention for the same exact reasons. In fact it sounds very similar in terms of avg. rent; except the property is located just north of downtown Phoenix and the purchase for the whole multifamily complex. I did it this way to avoid some of the problems you are currently having; and would advise going that route if possible.

[FlyerInHi]

Millennial, i was looking for a multiunit but those are impossible to find in a decent area.
There are many multi units but on deplorable streets full of other multi units so there would be spillover problems.

I believe in gentrification of older centrally located areas. But it’s hard to get owners on board. Some landlords are so cheap they won’t replace water valves until there are leaks. They don’t do any maintenance.

[millennial]

[quote=FlyerInHi]Millennial, i was looking for a multiunit but those are impossible to find in a decent area.
There are many multi units but on deplorable streets full of other multi units so there would be spillover problems.

I believe in gentrification of older centrally located areas. But it’s hard to get owners on board. Some landlords are so cheap they won’t replace water valves until there are leaks. They don’t do any maintenance.[/quote]

It sounds like you have a problem, but it also sounds like that many on the HOA board will agree to some maintenance improvements. What’s the ratio of rent vs. own in the complex? I think many owners would be OK with increase monthly HOA dues to improve the value of their property and if you can sell the idea to landlords that improved property/amenities = higher rents you will get their vote as well. I haven’t invested in Nevada before so don’t know if their is rent control, but you could try and increase rents to not only cover maintenance CAPEX but also some discretionary CAPEX and attract those that would appreciate the improved amenities and grounds. Typically those that appreciate their home will treat it nice as well.

[spdrun]

If I were holding to rent and not looking to flip, I’d keep my mouth shut, keep ahead of whatever structural issues the complex has, and not bother much getting the place prettified. Uglier complex = lower sale prices, for you to buy more condos. And really, if the location is the same, it doesn’t make much difference in rents.

[flyer]

Agree with sp. As long as you are able to find good tenants, you should be fine, and, hopefully, if you do sell, you’ll find a buyer who sees the same potential.

A few of our single and multi-family properties here and in other states, although not in “ghetto” or “deplorable” areas, they are in older, high demand areas.

We’ve always been happy with the returns, and have never had any issues we couldn’t handle, so things might work out better than you think. In your case, getting the HOA on board is key.

[FlyerInHi]

[quote=spdrun]If I were holding to rent and not looking to flip, I’d keep my mouth shut, keep ahead of whatever structural issues the complex has, and not bother much getting the place prettified. Uglier complex = lower sale prices, for you to buy more condos. And really, if the location is the same, it doesn’t make much difference in rents.[/quote]

I think you’re right. But I’m a perfectionist and expect everyone to live up my expectations. I put effort into fixing up my rentals and I want professionals in them.

The other owners just want the cash flow. They don’t know how to be their own general contractors and they can’t afford $15 to $30k to remodel. I’m just the new blood wanting to change things.

[Author]

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