Since I am on the ground in working class neighborhoods, I always try to find out the story of how that neighborhood became so distressed with low prices. I always find out that these houses used to be in great neighborhoods 20, 30, 40 years ago – but when the jobs left, the neighborhoods began to reflect that economic decline.
I have some words of caution, and some words of hope, for those whose entire real estate investing strategy relies on appreciation, as well as tips for what to look out for to avoid these errors that would otherwise take 20-30 years to find out. For example, “single industry areas” are susceptible, and with the future changing rapidly in an economic downward direction – caution and heads up should be used.
Check out this video for more information!
2 Comments
In Chicago working class neighborhoods are $150-$300 thousand. 30-50
thousand is just plain gang infested ghettos. Do you recommend buying in
these places? I buy condos for between 75-110 with 30k down. Seems to work
for cash flow better than houses.
Lisa, you stated that a 15-year (fixed) might be better than a 30-year
(fixed) with respect to “20 to 30 years” down the road in which certain
entities which are relied upon today “might not be there” in 20 to 30
years. Doesn’t the 15-year cost TWICE or even more than that, for the
15-year and if an owner already has a low or no Cash Flow, how on Earth
will we be able to do a 15-year as opposed to a 30-year? By the way, I
admire your knowledge and experience in the business and, as I have already
told you, I will be watching your very helpful programs. God bless!