I just got off the phone with my father and he was telling me they purchased another house in a not so great neighborhood. The neighborhood was a nice area about 15 years ago. Over the years it has been home to drug dealers and is predominantly minority dwellers.

I definitely wouldn’t invest in these areas as people don't take care of their property why would they take care of yours. Not to mention what does these areas do to property value?

While my dad and his partner tend to fix these houses up and hopes that the people around them will do the same...Is it a waste of time? I mean they must do something right because they make crazy money...

But my question is...Would you invest in these areas? Have you invested in these areas? What are the pro’s and con’s to investing in these neighborhoods?

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You can roll with me or under me. I don't care which one you choose! - - "me"

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Thank you for being a part of the FIB Team!

Gerald,

I think it would be a great risk but isn't this industry a complete risk?

I personally wouldn't rent these houses out but know of a few people that do really well with Section 8 tenants. What works for these investors are monthly or bi-monthly walk through of the properties to make sure they are being kept up.

We have done it all where this type of thing goes.

You have to have a process and a system and stick to it. If it doesn't work then try something else until it does. If you have not bought a junker yet and tried your luck you owe it to yourself to try it out.

I just did a house in one of these types of neighborhoods and sold it on owner financing last thursday (Dec. 27th). I bought it for 15k and put 10 into it and rented it to a couple for 300/month for awhile. They kept bugging us about financing so we owner financed it to them and they paid 55k on a 30 year fixed rate. We have this house free and clear right now and will recieve 141k in interest over the life of the loan!!!!

I'll do a couple hundred of those, how about you.

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Thank you for being a part of the FIB Team!

We have some upper end rentals, and honestly I have just as many problems as with the cheap ones in the 'hood'. I think in this business you have to be versitile and be able to do many things in order to make it/survive.

I like to look at it like the stock market;
you would not try to put all of your money into the bond and cd sector or all of it in the high risk sector, but you would be very diversified.

We have to be the same and have a few section 8 rentals, and handfull of rent to owns, so high end and some working class, and regular rentals as well. You have to be able to rehab and retail, wholesale, and rent to survive in this ever changing market. We owner finance to home owners, we do hard money to investors that want to buy our wholesale stuff, we fix rent and sell already rented houses. We try to stay as well rounded as possible. Believe it or not living in Alabama I have yet to own a trailer yet though, not because I won't, I just haven't found the right deal yet.

Steve,

Speaking of trailers.

My father and his partner went to the government auction and purchased (15) 16'*80' trailers they rent out. Each was under 7k and well worth their investment.

Currently the government halted the sales of these trailers because of formaldehyde and health concerns.

But at any event you can check this site http://gsaauctions.gov if you are ever interested.

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You can roll with me or under me. I don't care which one you choose! - - "me"

I just looked at 3 trailer parks today that are for sale down here. The guy even wants to owner fianance them, but I think they are going to be more headache than what I figured it would be worth. I just can't believe that this dude rents them for 135/week. He has about 30k or so gross with 3 parks!

What size and condition are these trailers in? My father made a decent amount on FEMA parks right after katrina. He would also purchase these campers from that site and rent those to FEMA for over $400 a month. Then turn around and sell the campers on eBay when the tenants moved out.

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You can roll with me or under me. I don't care which one you choose! - - "me"

They are decent the standard 16x30 or so for the most part, and he rents about 4 campers in one of the parks as well. He gets 125/week and covers the water and power.