New houses in a D hood ?
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New houses in a D hood ? (by Roy [AL]) Feb 17, 2024 9:50 AM
       New houses in a D hood ? (by NE [PA]) Feb 17, 2024 9:54 AM
       New houses in a D hood ? (by Ken [NY]) Feb 17, 2024 10:05 AM
       New houses in a D hood ? (by Roy [AL]) Feb 17, 2024 10:10 AM
       New houses in a D hood ? (by jonny [NY]) Feb 17, 2024 10:12 AM
       New houses in a D hood ? (by Roy [AL]) Feb 17, 2024 10:22 AM
       New houses in a D hood ? (by Vee [OH]) Feb 17, 2024 10:24 AM
       New houses in a D hood ? (by Ken [NY]) Feb 17, 2024 10:29 AM
       New houses in a D hood ? (by NE [PA]) Feb 17, 2024 10:34 AM
       New houses in a D hood ? (by Roy [AL]) Feb 17, 2024 10:40 AM
       New houses in a D hood ? (by Just Tim [AR]) Feb 17, 2024 11:07 AM
       New houses in a D hood ? (by Small potatoes [NY]) Feb 17, 2024 11:21 AM
       New houses in a D hood ? (by S i d [MO]) Feb 17, 2024 11:39 AM
       New houses in a D hood ? (by Mapleaf18 [NY]) Feb 17, 2024 11:42 AM
       New houses in a D hood ? (by RB [TN]) Feb 17, 2024 12:25 PM
       New houses in a D hood ? (by Roy [AL]) Feb 17, 2024 12:28 PM
       New houses in a D hood ? (by Small potatoes [NY]) Feb 17, 2024 4:12 PM
       New houses in a D hood ? (by WMH [NC]) Feb 17, 2024 4:22 PM
       New houses in a D hood ? (by tim [CA]) Feb 17, 2024 4:42 PM
       New houses in a D hood ? (by MikeA [TX]) Feb 17, 2024 4:46 PM
       New houses in a D hood ? (by PG [SC]) Feb 17, 2024 7:26 PM
       New houses in a D hood ? (by plenty [MO]) Feb 17, 2024 7:51 PM
       New houses in a D hood ? (by BRAD 20,000 [IN]) Feb 17, 2024 8:20 PM
       New houses in a D hood ? (by Ken [NY]) Feb 17, 2024 8:32 PM
       New houses in a D hood ? (by Ray-N-Pa [PA]) Feb 19, 2024 4:00 PM
       New houses in a D hood ? (by Roy [AL]) Feb 19, 2024 4:39 PM
       New houses in a D hood ? (by Ray-N-Pa [PA]) Feb 20, 2024 9:21 PM

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New houses in a D hood ? (by Roy [AL]) Posted on: Feb 17, 2024 9:50 AM
Message:

6 months ago, while driving to a rental house of mine located in a Class D hood, I noticed two brand new houses where being built in this neighborhood. I made the assumption that some house flipper had bought two severely dilapidated houses at a tax sale, then had both houses bulldozed and then poured concrete slab foundations for each new future house. Both houses are on adjacent streets just 200 feet from each other and the construction of each new house proceeded at the same pace since the same builder was building both houses.

Now, fast forward to today. Those two brand new houses are now finished and to my surprise, they were never intended to be flipped. These two new houses were built from the ground up for the rental market here! Both 3/2 houses were listed on Zillow yesterday at a monthly rents of $1,250, which for this Class D hood is mind boggling. Market rents for this D hood are $600-$750/month tops.

The street address for each house follows. Go on Zillow if you want to see these 2 identical brand new houses.

1009 Vinson Ave. Gadsden, AL 35903

604 Blythe Street, Gadsden, AL 35903

My only question is: is there any business logic in building brand new houses in Class D hoods? Less than a block from these two new houses are other houses where tenants have junk cars sitting on concrete blocks and household garbage scattered in their front yards! It is a typical D hood.

--71.207.xxx.xx




New houses in a D hood ? (by NE [PA]) Posted on: Feb 17, 2024 9:54 AM
Message:

With the vast majority of America becoming a class D hood, ya it makes some sense. If the numbers work, that should remove your opinion from the investment. I have some great QUALIFIED tenants in C-D level neighborhoods. --24.152.xxx.xx




New houses in a D hood ? (by Ken [NY]) Posted on: Feb 17, 2024 10:05 AM
Message:

I bet if you look into it further the builder was paid by the govt to do these projects as affordable housing --73.177.xxx.xx




New houses in a D hood ? (by Roy [AL]) Posted on: Feb 17, 2024 10:10 AM
Message:

NE,

I have great qualified tenants in C & D hoods also and they would all would love to live in a brand new modern 3/2 rental house. However, none of them would qualify from a 3X rent to income standpoint. In other words, tenants here who can afford $1,250/month rent usually live in Class B hoods. Yes, B hoods and not C or D hoods. --71.207.xxx.xx




New houses in a D hood ? (by jonny [NY]) Posted on: Feb 17, 2024 10:12 AM
Message:

I was going to say the same thing as Ken... Hands down I think that's the answer.

They've been doing that here as well. It may make the neighborhood look "nicer" because there is a new house(es) on the block but give it a few years and they look just like the other houses. --69.201.xx.xxx




New houses in a D hood ? (by Roy [AL]) Posted on: Feb 17, 2024 10:22 AM
Message:

Ken,

I plan on doing just what you mentioned. I know the owner of the property management company that posted these two houses on Zillow. We are not friends per se but I will eventually call him and try to find out who bought these two properties. --71.207.xxx.xx




New houses in a D hood ? (by Vee [OH]) Posted on: Feb 17, 2024 10:24 AM
Message:

Near the Cleveland Clinic main campus is a -D- neighborhood, govt funded 2 new houses which resulted in a lot of lumber going to other builder projects before it could be used onsite, after the framing was closed there was many episodes of missing stuff, gas pipes, shingles, the electric wiring unwound itself from the framing in the moonlight, eventually someone removed the window sashes and all, the window openings have not been removed yet which trends these places as open houses - it is a pun... --184.59.xxx.xx




New houses in a D hood ? (by Ken [NY]) Posted on: Feb 17, 2024 10:29 AM
Message:

Roy, can you go to the county clerks office or online? look it up there where you will get the truth and not someones story --73.177.xxx.xx




New houses in a D hood ? (by NE [PA]) Posted on: Feb 17, 2024 10:34 AM
Message:

Roy, hes probably not looking to draw your ghetto tenants out of your units and into his houses. Possibly hes trying to draw more qualified tenants from different areas who are willing to live in a D class hood as long as the property is newer and more affordable than out in an A or B class neighborhood. --24.152.xxx.xx




New houses in a D hood ? (by Roy [AL]) Posted on: Feb 17, 2024 10:40 AM
Message:

Ken,

I will do that on Monday. Now, if HUD will give me (not loan) the money to build new houses in D hoods, I will get into this game myself. In this same hood, there are several dilapidated houses that need a bulldozer and new development. --71.207.xxx.xx




New houses in a D hood ? (by Just Tim [AR]) Posted on: Feb 17, 2024 11:07 AM
Message:

Roy you might be surprised what you can find using county records and Google.

I searched for info on 1009 Vinson.

The property is owned by RAC GADSDEN, LLC.

RAC GADSEN, LLC appears to be owned/controlled by Michael Colvard of Glencoe AL and Frank Gillen of Miami FL. Other entities involved include RAC Real Estate Acquisition Corp and My City Builders, Inc.

They acquired the property as a vacant lot from the City of Gadsen. Probably for a little of nothing.

This is going on all over the country. The city files dilapidation liens against unoccupied properties that might need some repair or just be ugly. If the owner can't satisfy the city then the city tears the house down and sells the property to a builder. Or the owner has abandoned the lot and the city takes it for cleaning and mowing liens.

It's "funny" how in certain small towns it seems to be only one builder that buys all the lots.

--68.1.xxx.xx




New houses in a D hood ? (by Small potatoes [NY]) Posted on: Feb 17, 2024 11:21 AM
Message:

Roy what do you think it cost to build one of these shacks? --172.56.xxx.xx




New houses in a D hood ? (by S i d [MO]) Posted on: Feb 17, 2024 11:39 AM
Message:

Yep, I sold a double lot to a builder that I got on a tax sale. His mode of operation is to build brand new 2/1/2 (2 bed, 1 bath, 2 car garage) duplexes and rent them to Section 8 for top $. Lots of Govt money going into these areas for redevelopment, and as long as you agree to take their rent rate, you get 5 years of tax abatements too!

I want to say he was getting $695 per side, and that was pre-Covid run up. Think he was "all in" cost-wise at about $60,000 per unit, so doing a little better than 1% rule for brand new units. Wonder how they're holding up?

This program only works for new or significantly upgraded housing... my humble abodes don't qualify, and I'm not sure I'd want the Govt messing with my stuff anyway.

--184.4.xx.xxx




New houses in a D hood ? (by Mapleaf18 [NY]) Posted on: Feb 17, 2024 11:42 AM
Message:

Roy we were just in Mobile and toured a bunch of D hood churn -n- burn small SFHs. Not our market but interesting just the same. --172.58.xxx.xxx




New houses in a D hood ? (by RB [TN]) Posted on: Feb 17, 2024 12:25 PM
Message:

Its all part of a push out,

and its happening a lot in small town America.

Out with the old, in with the new.

Things will only go (farther) down hill in C, D hoods,

if someone doesn't take action.

A fine example is Lebanon TN.

--69.130.xxx.xxx




New houses in a D hood ? (by Roy [AL]) Posted on: Feb 17, 2024 12:28 PM
Message:

Just Tim

I checked the county tax records too. I was not familiar with RAC LLC that was listed but I am very familiar with the RE Rentals company that manages these properties and 800 other local rental properties. RE Rentals does not have a good reputation in this town but that is neither here nor there.

Small Potatoes: These new houses are listed at 1,250 square feet. Assuming they were built cheap at $100/sq. ft. that means the cost basis would be $125,000 each. And the listed rents are $1.00 per square foot.

For comparison sake, one block over, I have a 1955 vintage 2/1 that is 750 square feet and I get $750 rent or $1 dollar per sq. ft. However, I did not have to spend $125K to obtain my rent. I paid $10K for the house and another $10K to rehab it. So, I get $750/month on $20K house. Current house re-sell value is around $60,000. Do the math.

Mapleaf18 - I know those Class D hood churn-n-burn SFH you mentioned all too well. Most investors are scared to death over the thought of buying one and rehabbing it. Not me, I became wealthy beyond my wildest dreams over these type houses.

--71.207.xxx.xx




New houses in a D hood ? (by Small potatoes [NY]) Posted on: Feb 17, 2024 4:12 PM
Message:

In the NE I'd think the cost is easily 150 sf and higher 250 for your personal fancy pants home --172.56.xxx.xx




New houses in a D hood ? (by WMH [NC]) Posted on: Feb 17, 2024 4:22 PM
Message:

Remember the Opportunity Zones set up during a previous admin? Could be that. We have a city nearby that has undergone significant revamping / renovations in the past several years. Prior to OZ investment tax credits, it was going downhill faster and faster. Now I don't KNOW that all the investments are OZs, but it seems likely. --173.28.xx.xxx




New houses in a D hood ? (by tim [CA]) Posted on: Feb 17, 2024 4:42 PM
Message:

gentrification.

--108.201.xx.xx




New houses in a D hood ? (by MikeA [TX]) Posted on: Feb 17, 2024 4:46 PM
Message:

We're seeing that here in the "opportunity zone" except instead of building new they are moving old houses into many of the vacant lots in this neighborhood and doing a complete gut to the studs and remodel on a new foundation, same concept except a little cheaper build. Nothing like a good incentive to avoid capital gains taxes. --209.205.xxx.xx




New houses in a D hood ? (by PG [SC]) Posted on: Feb 17, 2024 7:26 PM
Message:

ROY

Just think in a few years you will be able to buy the house for your price. It is about the money. If an agency provides the money someone will find a way to spend it. Some times good some times a bridge to no where.

Logic - probably none

--184.20.xx.xxx




New houses in a D hood ? (by plenty [MO]) Posted on: Feb 17, 2024 7:51 PM
Message:

Bottom line is what is the school district like and are there any private schools in the area. Schools are the key to the investment. --172.59.xxx.xxx




New houses in a D hood ? (by BRAD 20,000 [IN]) Posted on: Feb 17, 2024 8:20 PM
Message:

Roy,

My city is doing the same thing. They made a list of 50 houses that are vacant or "dilapidated" (in the eye of the beholder).

Big popular news! The politicians look like saviors of the community - removing the "blight" by talking the owners who cannot afford the repairs into selling to the city for $5000 thru a grant designed ONLY for tearing down houses.

How about HELPING the family repair their home.

Then they GIVE the vacant lot to a Habitat for Humanity type agency that gets donated labor and such. Nobody ever talks about the people who lost their home.

Combine this effect there are no more buildable lots in my town. New young investors are buying old small houses, tearing them down or building over them - larger, garages, all new, top rents. People pay their rent for these nice new pretty houses without considering the neighborhood.

Instant gentrification.

This is really good news for you, Roy! YOUR props on that street just went up in value. Sell them to this builder!

BRAD

--73.103.xxx.xxx




New houses in a D hood ? (by Ken [NY]) Posted on: Feb 17, 2024 8:32 PM
Message:

You are good at buying low priced houses, buy them for $5000 then sell them to these kind of buyers for $40000, i doubt they are out looking for deals,they spend there time begging for free money so they dont care what they pay for them --73.177.xxx.xx




New houses in a D hood ? (by Ray-N-Pa [PA]) Posted on: Feb 19, 2024 4:00 PM
Message:

There ae so many things an investor can do with a piece of land. The one thing they can't do is move it.

A D neighborhood is one where the majority of the folks living there don't have a job. So you can have a couple real nice places surrounded by not so nice.

I suppose if your aim is strictly for cash flow purposes, you can make the numbers work for you. Boy though, in a class D location, there tends to be so much turn over that it is tough to justify not picking up a class C place. Class D places typically not appreciate. I like my blue collar residents, they can buy a place. A class D location, is a headache to manage, so I hope you are making the numbers reflect that.

I like a class C location with a steady economy. There are lots of places near me though where the economy is going south --24.101.xxx.xxx




New houses in a D hood ? (by Roy [AL]) Posted on: Feb 19, 2024 4:39 PM
Message:

Ray in PA

Out of 16 houses, I have 5 that are located in Class D hoods. I tend to get Class C blue collar tenants with decent jobs to live there. I don't have any problems with my tenants, however, it is the trashy D hood neighbors/tenants who I do have a problem with. They do not seem to mind living inside their own garbage dump. It is what it is though. --71.207.xxx.xx




New houses in a D hood ? (by Ray-N-Pa [PA]) Posted on: Feb 20, 2024 9:21 PM
Message:

You are a better man than I am Roy.

I have to shift to nicer locations as I step up.

Now I don't want you think that I am an investor snob at this point. I picked up three dumps at the tax sale not because any of them were A or B units. Nope, I picked them up as these three I was able to pick up for 10 cents on the dollar. I have been working on that first one rather steadily in getting upgraded. When I tell you upgraded - tomorrow for example the excavator will be digging so we can install a new water line. It should be completely rent ready in late April or early May.

If it is a system on this place, it will be replaced.

--24.101.xxx.xxx



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