Class D properties
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Class D properties (by Roy [AL]) Feb 16, 2022 8:13 AM
       Class D properties (by S i d [MO]) Feb 16, 2022 8:28 AM
       Class D properties (by NE [PA]) Feb 16, 2022 8:38 AM
       Class D properties (by Ken [NY]) Feb 16, 2022 8:50 AM
       Class D properties (by Robert J [CA]) Feb 16, 2022 8:58 AM
       Class D properties (by Roy [AL]) Feb 16, 2022 9:17 AM
       Class D properties (by Pat [VA]) Feb 16, 2022 9:19 AM
       Class D properties (by Nicole [PA]) Feb 16, 2022 9:35 AM
       Class D properties (by Roy [AL]) Feb 16, 2022 9:35 AM
       Class D properties (by NE [PA]) Feb 16, 2022 9:43 AM
       Class D properties (by Roy [AL]) Feb 16, 2022 10:04 AM
       Class D properties (by NE [PA]) Feb 16, 2022 10:10 AM
       Class D properties (by Roy [AL]) Feb 16, 2022 10:22 AM
       Class D properties (by Jason [VA]) Feb 16, 2022 10:28 AM
       Class D properties (by 6x6 [TN]) Feb 16, 2022 10:43 AM
       Class D properties (by Roy [AL]) Feb 16, 2022 10:53 AM
       Class D properties (by Ken [NY]) Feb 16, 2022 11:05 AM
       Class D properties (by Roy [AL]) Feb 16, 2022 11:46 AM
       Class D properties (by Ken [NY]) Feb 16, 2022 12:21 PM
       Class D properties (by S i d [MO]) Feb 16, 2022 12:37 PM
       Class D properties (by Roy [AL]) Feb 16, 2022 3:47 PM
       Class D properties (by Ray-N-Pa [PA]) Feb 16, 2022 4:05 PM
       Class D properties (by Roy [AL]) Feb 16, 2022 5:14 PM
       Class D properties (by Sisco [MO]) Feb 16, 2022 6:06 PM
       Class D properties (by NE [PA]) Feb 16, 2022 6:14 PM
       Class D properties (by Nicole [PA]) Feb 16, 2022 6:19 PM
       Class D properties (by Roy [AL]) Feb 16, 2022 6:22 PM
       Class D properties (by T [IN]) Feb 16, 2022 6:22 PM
       Class D properties (by Roy [AL]) Feb 16, 2022 6:43 PM
       Class D properties (by Ken [NY]) Feb 16, 2022 6:56 PM
       Class D properties (by Roy [AL]) Feb 16, 2022 7:58 PM
       Class D properties (by Ken [NY]) Feb 16, 2022 8:23 PM
       Class D properties (by MikeA [TX]) Feb 16, 2022 8:46 PM
       Class D properties (by Robert,OntarioCanada [ON]) Feb 16, 2022 9:05 PM
       Class D properties (by Roy [AL]) Feb 16, 2022 9:23 PM
       Class D properties (by Nicole [PA]) Feb 17, 2022 8:41 AM
       Class D properties (by Roy [AL]) Feb 17, 2022 10:02 AM
       Class D properties (by mike [CA]) Feb 18, 2022 12:01 PM


Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 8:13 AM
Message:

Since my only vacancy right now is in a Class D neighborhood and yesterday I had my first open house, I was just wondering how many LL's here have rental properties in Class D hoods. Most of my properties are in C hoods, however, I do have 5 that in D hoods.

To me, there is big difference between a D & F hood. I will continue buy in a D hood but not in an F hood, which fortunately my small town only has 1 of. --71.207.xxx.x




Class D properties (by S i d [MO]) Posted on: Feb 16, 2022 8:28 AM
Message:

Morning, Roy.

You criteria don't tell us anything about what the actual differences are between D and F. We've discussed the topic here before, so I'm going with what we used to talk about.

People: mostly folks who have fixed income/rental assistance. Some lower end blue collar workers, but more likely retail/fast food or just on the dole. Folks are transitory, moving in and out via revolving door land lords who don't screen but take wads of cash and then boot them when the cash dries up.

Schools: Poor attendance and graduation rates.

Crime: Moderate to high crimes against property, drugs, and occasionally people.

Properties: Houses are shabby and visibility showing disrepair. Camaros up on cinder blocks in the yard. Yards not mowed. Couches on the porch.

To me, the main difference that separates D from F is that F hoods have a lot of violent crime ranging from assault to burglary (breaking and entering) and hard drugs. Shootings and murders are a monthly thing. I won't go into F hoods, period, for this very reason.

I own a few on the boundary line between C and D, but I stop at C-/D+. Only reason is when I was younger I lived in a C place, and there are still decent folks there who have a chance at life. As cruel as it is to say, most folks don't escape D to F hoods. They are there due to many problems, some not of their making, but many as a repeat result of poor choices. Drugs, alcohol, hopping in the sack from one abusive relationship to another until the person is "used up" as the saying goes. The folks who lived to party all weekend long in their 20s and 30s and then found themselves still there in their 40s and onward with no future plans, too many kids to handle, and their bodies worn out by hard living. It's a sad state of affairs.

The bottom line I find is no one who has a decent work ethic and stays sober has to live in anything lower than Class C. I lived in C-/D+ area temporarily because it was convenient to my university classes and super cheap. Got out as fast as I could swing it, though.

--108.230.xxx.xx




Class D properties (by NE [PA]) Posted on: Feb 16, 2022 8:38 AM
Message:

I have a few. I work to get B grade or greater tenants in them though. --174.198.x.xxx




Class D properties (by Ken [NY]) Posted on: Feb 16, 2022 8:50 AM
Message:

I got my start in C and D hoods,i wont even drive through a D hood anymore even just to get across town,i will buy a C hood house just for resale. I dont even know what an F hood is but i imagine same as what i am calling D. --72.231.xxx.xxx




Class D properties (by Robert J [CA]) Posted on: Feb 16, 2022 8:58 AM
Message:

I was at my Class "D" property back in 1994 when I saw some kids breaking into my tenants car. I knocked on my tenants door but he was too drunk and couldn't walk from the sofa to his front door. This is a 11 unit building. So I asked the kids, 7 to 15 years of age to please leave my tenants car alone. On kid, around 12, pulled his 38 revolver and said bang. I said you can do as you please, I can't stop you.

The next day I asked the same kids to stop spray painting my building. Two days later my white property had all different colors of spray paint all over 90% of the proeprty.

I sold that property within a few months. --47.155.xx.xxx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 9:17 AM
Message:

Sid,

Yesterday you made the 'New Class C Normal' post which was great and educational. In a few days, I hope to be able to make a similar post titled the 'New Class D normal'.

In the past, rents have always been stagnant in Class D hoods,...but things are changing now. Two years ago, rents in most Class D hoods (my town) would range from $350-$500 for SFH. Now, that range starts at $500.00 and tops out at ???

My advertised rent is $650 for my small no-frills 2/1 house and yesterday I got mobbed by the number of people who showed up to my open house. So many showed up that I ran out of applications to pass out, so the day ended early. I am wondering now if my advertised rent was too low?

Your description of a Class D hood is about the same as mine. However, Class F is a true slum where drug dealers and prostitutes ply their trade in broad daylight. I avoid the only Class F hood my town has which is 4 miles from any of my rental properties.

--71.207.xxx.x




Class D properties (by Pat [VA]) Posted on: Feb 16, 2022 9:19 AM
Message:

We've acquired most of our rentals from repos/HUD, the advantage is they are vacant & USUALLY have all of the judgments paid off against them.

That being said, they are not always in the best neighborhoods but our whole area is rural, small clusters of homes here & there, dotted throughout farming/wooded areas. Most have been on 1/2 to 1 1/2 acre lots with well & septic tank. Often they are next door to close family that can hold a grudge for years! Some of ours are singlewides that I placed on our farm when I first got started. Also a couple of houses on land nearby that we eventually bought.

We keep our properties up, we update and improve our places at each turnover. So yeah, it hurts a little when we have a B prospect turn their nose up at our C or D+ place but rentals are getting so scarce in our area that might change soon. --71.219.xxx.xxx




Class D properties (by Nicole [PA]) Posted on: Feb 16, 2022 9:35 AM
Message:

...The bottom line I find is no one who has a decent work ethic and stays sober has to live in anything lower than Class C....

I'm not sure the differences in neighborhood classifications but I generally agree with Sid's above assessment except for this. Many people who grow up and live in these type neighborhoods never leave. Two and three generations live within a block or two of each other. The thought of moving away never enters their minds. --98.237.xxx.xx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 9:35 AM
Message:

NE,

I have put B tenants in my C houses and it never works out. As soon as a B tenant hears a wife beating going on next door or some other tenant behavior that is common in C hoods, that B tenant wants to move out ASAP. --71.207.xxx.x




Class D properties (by NE [PA]) Posted on: Feb 16, 2022 9:43 AM
Message:

Roy, if my B grade tenant wanted to move out, he or she can pay the early termination fee and go. If Mr. Wife Beater next door continuously beats Mrs. Perpetual Victim, then they would get one warning and be moved out. Then a fresh coat of paint and I’ll have 2 B grade tenants in my D grade building. --174.198.x.xxx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 10:04 AM
Message:

NE,

Most Class B tenants here will not lower their standards down to the D level. Class B tenants here will not rent anything that does not have Central Heat/Air which most Class D houses do not have. Class B will rent a Class C house here but just until the neighborhood gets noisy. I would have constant turnover putting Class B in my C houses. --71.207.xxx.x




Class D properties (by NE [PA]) Posted on: Feb 16, 2022 10:10 AM
Message:

I probably would not buy class D properties if all I could attract was class D tenants. I wouldn’t want what comes with that group. I would see that being more management intensive. --174.198.x.xxx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 10:22 AM
Message:

NE,

In the early months of Class C & D tenancy, it can be management intensive but that changes once I have had time to train them to my way of doing things. New Class C & D tenants will test me just to see what they can get away with (late rent) and when I stand up to them and don't back down, they learn quickly they will have to play by my rules or leave now. --71.207.xxx.x




Class D properties (by Jason [VA]) Posted on: Feb 16, 2022 10:28 AM
Message:

I prefer less stress over higher profit margins. I’d rather deal with a “hands off” higher class of tenant than a D class tenant that requires my constant time and attention. --50.202.xxx.xx




Class D properties (by 6x6 [TN]) Posted on: Feb 16, 2022 10:43 AM
Message:

There have been a few houses around here for sale in class D. No thanks, I'm not interested. Class C is bad enough. One day I hope to grow up to a B. --73.120.xx.xxx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 10:53 AM
Message:

Jason,

I prefer higher profit margins and less stress too. My tenants do not create any stress in my life. I define stress as when I get a letter in the mail one day from an attorney who represents a Class A or B tenant and they want to sue me over why the tenant did not get their full deposit returned. When all the tenant had to do was call me for an answer,...they sic their ambulance chasing lawyer on me. That means I have to call my lawyer and start paying legal fees. This does not happen with C & D tenants. --71.207.xxx.x




Class D properties (by Ken [NY]) Posted on: Feb 16, 2022 11:05 AM
Message:

Roy,that is not stressful,that is a fun challenge.Try being sued for $90 million because your scumbag class d tenant fed there kid lead chips then sues you --72.231.xxx.xxx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 11:46 AM
Message:

Ken,

LLs can get sued for anything and any amount. What really amazes me is when a Class A tenant pays an attorney $1,000 in legal fees in an attempt to collect the $250.00 that the LL kept for cleaning expenses.

Why just $90 million? Why not $180 million? They can also sue the toy manufacturer who used lead paint to paint the kids toys with. I thought the lead and mold rush was a thing of the past but I guess not. --71.207.xxx.x




Class D properties (by Ken [NY]) Posted on: Feb 16, 2022 12:21 PM
Message:

Roy,it was back from when insurance companies did pay out on lead ,mid to late 90s. now days as soon as the attorney finds out you dont have lead coverage in the policy they dont take them as a client.I have ended up in court against legal aid attorneys a few times,they get mad that i even question there abilities and am willing to argue my case. --72.231.xxx.xxx




Class D properties (by S i d [MO]) Posted on: Feb 16, 2022 12:37 PM
Message:

At this stage, I'm still content to manage Class C, but like 6x6 I will probably "Grow up" some day and convert most of my portfolio to Class B and commercial.

Looking at my portfolio, my proportion is already about 50/50 residential to commercials. Residential produces better cash flow overall, but the commercial properties are less management hassle and capital is concentrated in a few large assets. There are plusses and minuses to that as well, but so far the plusses dominate.

Eviction moratoriums applied to residential only, not commercial. That alone is enough for anyone to wisely consider whether or not they wish to keep and/or expand their residential portfolio, and another reason why I may upgrade or divest my residential holdings. Class B tenants have a reputation to protect, so even if they CAN get away with non-payment, I think it is less likely they would try it. Still, --108.230.xxx.xx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 3:47 PM
Message:

Sid,

Class B rentals are for people who have 6 figure day jobs and don't really need the rent money for anything more than the monthly mortgage payment. Most Class B investors I know seem to be happy if their monthly rent is just enough to cover their mortgage payment. In other words, breaking even each month is what they strive for and when the roof needs to replaced, they bite the bullet and take that money from their day job income. When the Class B tenant skips out on you, that is when Class B houses become 'alligators'. They will eat you alive in covering all of the monthly expenses until you can find another tenant.

Since I have never had a day job or a spouse with a day job, I had no choice but to invest in houses that do a lot more than just break-even each month. I had to invest in houses that consistently return 20 -30% cash on cash returns which only Class C & D houses can do, assuming you buy only at wholesale. Since 2006, I have never once regretted my decision to invest in C & D hoods. I have the money now to invest in Class A & B houses, but why would I want to buy a house that just breaks even every month? And why would I buy any house where all I do is feed the alligator once a month?

Unless someone here can give me a really great reason to start investing in Class A or B houses, I will stick with what I know best,...C & D's. --71.207.xxx.x




Class D properties (by Ray-N-Pa [PA]) Posted on: Feb 16, 2022 4:05 PM
Message:

I started out my career with lower end units in not so good parts of town. With crappy apartments in crappy location, I got crappy tenants. Lots of turn overs and no pays. The customer was not happy there for I in turn was not happy - because they made me less than happy.

A so the circle went around and around. These lower end properties did make sense in my eyes since I was putting little money down.

The longer I stayed in the field, I learned that there were some cost that were not captured in a simple profit loss or cash flow statement. Turn over cost and capital investments after kicking out a non-payer were special cause items in my eyes back then. These things happened over and over and over again but I was treating them as special events.

I was able to slowly dig my way out of the class D trap. I was happier about my product and believe it or not even though the cash flow was a bit tighter with a nicer unit, the turn over cost went down.

More power to the Landlord that starts at class D properties and doesn't strive to achieve better. Hopefully the little bit of extra cash will allow you to go on vacation, get therapy sessions or buy lots of Crown Royal. Beat up properties attract beat up residents who will beat up on the property and on the LL. --24.101.xxx.xxx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 5:14 PM
Message:

Ray-N-PA

I am sorry you had such a bad experience with crappy apartments and crappy tenants. Did you rehab the apartments after you bought them and then raise your rents? This is what produces better tenants at higher rents. Now if you did not do any rehab, then I can understand why you burned yourself out in D properties.

Personally, I would never buy apartments in Class D hoods. With multi-units, all of your drama tenants are under 1 roof and IMO, this has much more downside and upside. --71.207.xxx.x




Class D properties (by Sisco [MO]) Posted on: Feb 16, 2022 6:06 PM
Message:

Roy, it appears that you are the only Class D LL who responded. --149.76.xxx.xxx




Class D properties (by NE [PA]) Posted on: Feb 16, 2022 6:14 PM
Message:

I have inherited Class D tenants in an F building in a class D neighborhood. Roach infested pig sty. They’re at market, have paid me more in rent than I paid for the building. I hope they stay for another 30 years and I don’t care if they move and their kids take over as long as they pay. --24.152.xxx.xx




Class D properties (by Nicole [PA]) Posted on: Feb 16, 2022 6:19 PM
Message:

Sisco, I don't understand these classifications but for MANY years I'd guess most folks here say I had Class D ... but that is the majority of the cities in my area. In the center cities, there are only a few pockets of "decent" areas. The rest are old and run down with a nice house here and there on the blocks. I made a $hi+ load money off these places and had basically decent tenants ,,, a few for 10+ years --98.237.xxx.xx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 6:22 PM
Message:

Sisco,

I just wanted to know if I was the lone wolf here,...I guess so. However, my town has Class C & D landlords spread out all over town. No reason to feel lonely here, I have plenty of company. --71.207.xxx.x




Class D properties (by T [IN]) Posted on: Feb 16, 2022 6:22 PM
Message:

I bought one class D rental... sold it a few years later. Talk about a headache the cash flow wasn't worth it. Class B multi apartment or commercial property for me. --76.77.xxx.xxx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 6:43 PM
Message:

Nicole said, "I made a $hi+ load money off these places and had basically decent tenants ,,, a few for 10+ years"

Nicole - I am in the process of making a $hi+ load of money off these places and contrary to popular opinion here, I have decent non-drama rent paying tenants too. Everybody here wants to assume that all Class D tenants are scumbags and that could not be any further from the truth.

--71.207.xxx.x




Class D properties (by Ken [NY]) Posted on: Feb 16, 2022 6:56 PM
Message:

Roy,maybe you are calling class D what i call class C but yes as far as i am concerned all class D tenants are scumbags --72.231.xxx.xxx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 7:58 PM
Message:

Ken,

Maybe you should give me your definition of Scumbag tenant. The only scumbags I am aware of usually live rent free by sponging off their mother and/or reside in the county jail. With that being said, would a white trash redneck that has a job and pays rent on the 1st, would you consider him (or her) a scumbag? This post is getting interesting now. LOL

--71.207.xxx.x




Class D properties (by Ken [NY]) Posted on: Feb 16, 2022 8:23 PM
Message:

That guy could be a scumbag and in the right house i wouldnt care. --72.231.xxx.xxx




Class D properties (by MikeA [TX]) Posted on: Feb 16, 2022 8:46 PM
Message:

Used to have some D properties. I fixed them up and sold them years ago. D properties simply take too much time and energy for me, life is too short. There wasn't a week went by that I wasn't dealing with a lease violation, tenant damage, midnight move-out, or a litany of other things caused by people who are one bad decision away from the next life meltdown. Once I moved up to class C and B properties I have 1/10th the number of tenant generated problems.

--72.48.xxx.xxx




Class D properties (by Robert,OntarioCanada [ON]) Posted on: Feb 16, 2022 9:05 PM
Message:

No matter the class what is going to determine in the future of any rental unit or house is energy efficiency as the cost of utilities continues to rise then those rental units or houses will be vacant. Electric baseboard resistant heating is cheap to install but not very energy efficient where a high efficiency split heat pump will easily use half the wattage for heating and cooling. While a higher rent but lower energy costs for upgrades. --68.69.xxx.xxx




Class D properties (by Roy [AL]) Posted on: Feb 16, 2022 9:23 PM
Message:

Robert in Canada,

Energy efficiency is low on the priority list of most of my D tenants. These folks run the heat on high and instead of turning down the thermostat, they open the windows to let some of that expensive heat escape. Then they complain about high utility bills and I just ignore them.

--71.207.xxx.x




Class D properties (by Nicole [PA]) Posted on: Feb 17, 2022 8:41 AM
Message:

Last month I was "in town" and there was some type road construction so rather than patiently wait my turn with the flag man, I went up and down several alleys to get to another street. I was (and I knew where I was going) in what we called "the projects" when I was growing up. Not sure how the actual rent is calculated (or who pays it) but I do know utilities are included in the rent. This was during one of the cold snaps where the daily high was single digits. There were quite a few second story windows opened. Also, nothing to do with this, I saw those windows also did not have screens in them. --98.237.xxx.xx




Class D properties (by Roy [AL]) Posted on: Feb 17, 2022 10:02 AM
Message:

Nicole,

In my town, most of the old government 'projects' that were built back in 1960's are now located in the only Class F neighborhood my town has. It is a war zone down there and I try to avoid it whenever possible. --71.207.xxx.x




Class D properties (by mike [CA]) Posted on: Feb 18, 2022 12:01 PM
Message:

class D...the applicants for those must be a real hoot! i'm sure i'd never be able to stomach the stupidity you must encounter. --75.80.xx.xx





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