The agent we talked to knew of a 24 unit building in a rougher part of town that the owner was trying to get rid of due to some financial difficulties. There were some back taxes owed, and the property needed a new roof and some other rehab, but after running the numbers it was at least a 30 CAP once the work was done and the occupancy was brought back up. This is a great deal! We currently have a couple of investors lined up for it as long as the roof repair costs aren't outrageous, but even if it ends up being out of their budget we'll have several other investors lined up to get their hands on it.
We mentioned it is in a rougher part of town, and for some investors this is outside their comfort zone, however, C and D-class neighborhoods can be very profitable with some good property management. The key is to find a property manager who knows Section 8, and has experience with these types of neighborhoods. Buildings in these neighborhoods tend to be less expensive, and the rehab costs are lower because they aren't expected to be as luxurious as higher end areas. They still need to be safe, clean and comfortable, but they don't need granite countertops, tile floors, and a fitness room.
We have a few more properties in Cleveland lined up to be evaluated in February, so if you're interested in good cash-flowing properties in a good rental market, drop us a line and we'll see what we can find for you. We can do as little as find the properties and arrange for property management and rehab crews, to managing everything right up to the point of occupancy. Some investors want to be hands on and manage everything themselves, and other just want to sign he checks and collect the profits. Whatever type of investor you are, we can tailor the deal for you.
We're off to Florida soon to look at some more opportunities there as well. We'll be sure to let you know what we find!