This is prospective property Charlie #2 (PPC #2), a 5-unit building built in 1930 with an asking price of $100k. I parked my car a couple houses down, then got out and started walking around the neighborhood. The first thing I noticed was the amount of houses that were up for sale on that block alone. There were at least 3 houses besides this one that is for sale. That’s not a good sign. It’s either the neighborhood is bad, or on its way to becoming bad. It’s also about two blocks away from property Chi and four blocks from property Alpha. You would think that having properties so close together would be a good thing, but I’m really trying to get out of that area. I’m tired of that damned area. The street itself has middle to lower income families, and at least two properties that could be trouble. Dogs barking, loud music, and people on their porch talking loud on their cellphones is always a good hint. As I went adjacent to the street, the neighborhood became so much better. They were nice and quiet single family homes and people inside watching TV like they should be. Streets with single family homes are usually much better and quieter than streets with multi-family homes. I could tell that the block on which PPC #2 is located is the trouble block.
The house itself looked great. Even though it was built in 1930 and I’m tired of the higher maintenance costs of old houses, the property had nice structure with brick/stucco exterior. Seeing stucco exterior really reminds me of NYC for some reason. It had new windows and everything looked fine. One feature that really made me consider this place is the attic. Online, they said that the attic is HUGE, and I can only imagine the kind of apartment I can build in there. It’s also on the same block as the former Walbogs supermarket. As I predicted, another supermarket has already purchased that place, so there should be a new market there before winter starts. I didn’t like that the property had no backyard and I don’t think there’s off-street parking in the back. 5 apartments with no off-street parking? Questionable neighborhood on the North side? Across the street from a brand new supermarket? Pinky, are you thinking what I’m thinking? Yes: immigrants!
For the management of this property to be successful and go as smoothly as possible, I’m gonna need immigrant tenants. As I explained in a post I did a few weeks ago, Love for the Immigration Nation, the north side of Smalltown is a haven to immigrants and they don’t really care what neighborhood they live in. Most of them don't have vehicles, so being close to a supermarket is like premium location to them. I can even get family members of property Chi to live there since the property is so close to them. The problem with immigrants is that they never pay standard price. Those apartments all look like one-bedroom units. One-bedroom units go for $500, but immigrants will probably take it for $450. $450 x 5 apartments is a monthly rent of $2250. After taxes and mortgage is paid, I’m looking at a NOI (net operating income or PURE profit, remember?) of around $1500 per month. Not bad, but definitely not the potential of PPC #1. PPC #1 has a much better neighborhood (Beautiful Valley w/mostly single family homes), more units (6), and better profit ($2000+). In fact, the only good thing about PPC #2 is the fact that there doesn’t seem to be much wrong with it, so I don’t have to spend 6 months fixing up the apartments like I’m assuming I’ll have to do with PPC #1. That’s a lot of extra money in the short term, but is it worth it to be stuck in that neighborhood in the long run?
Overall I like Prospective Property Charlie #2, but not as much as PPC #1. The Beautiful Valley property is still my #1 choice. Once the middle of November hits, I’ll start making appointments to see the insides of these places so I can truly compare and contrast. For now, all I can do is window shop to see what’s out there.
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