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Should You Buy Rental Properties in a D Class Neighborhood?

What about buying
rental properties in a D class neighborhood? That’s today’s video. Let’s dive in. Hey, everybody. I’m Clayton Morris. I’m the founder
of Morris Invest. I’m a longtime real
estate investor, and I like to buy
properties, mostly in C and B neighborhoods. I’ve talked about it
here on the show before. If you want to watch my full
video on neighborhood’s, you can click on the image– the
description below this video. We’ll have a link there, plus a
little card that just popped up here. You can watch that, as well. But back to today’s
topic, D neighborhoods. And occasionally I get this
question from investors, you know, well, these
properties aren’t located in D neighborhoods, are they? Or have you ever purchased a
property in a D neighborhood? And I have not. Now, why would I buy
properties in a D neighborhood? What is the potential there? And first of all, what
is a D neighborhood? Well, D neighborhood,
frankly, is an area that’s going to
have a much higher crime. Typically more of the
buildings and the properties are going to be dilapidated;
they’re going to need work. You’re going to see a lot more
abandoned buildings, houses that have boarded up
front faces to them. They are going to have,
like I said, higher crime. There are really neighborhoods
that aren’t transitioned yet. C neighborhoods are
the neighborhoods that are on their way to
becoming B neighborhoods. So they have lower crime. They have blue collar people
who live in the properties; typically, they go to work
every day, they have jobs. Those are the neighborhoods
that I love to invest. So when someone the other
day asked me, do you ever– would you consider
buying a D property? I said, absolutely, I would. But I would probably
want to buy a few of them all in the same area, so
that I could help transition that whole street, and
help make that whole street a better place for
people to live. You see here’s the thing– as I
talk about in my other videos– I’m not a fan of
A neighborhoods. I’m not a fan of A properties. And if you want
more information, again, click on the video
that I’ve provided here. You’re going to
have more problems. You’re going to have, you know,
more problems with the tenants. You’re going to have more things
to fix in A neighborhoods, and you’re going to get
a lower value and lower bang for your buck by
investing in A neighborhoods. C neighborhoods offer you,
usually, the highest return. They’re going to give
you the highest ROI. Probably able to achieve
them for a little bit lower, and you’re going to get a
high return on investment. So the difference between
an A neighborhood and a D neighborhood, I think
there’s much more potential to buy a D
neighborhood property, and to watch it move up into C
and eventually B neighborhoods. But again, do your
homework before you just pick up one crappy property
in a D neighborhood that doesn’t have the
potential to move into the C neighborhoods. It’s a very tricky business,
but if you can buy up a whole block of properties– we
had one investor that actually was able to pick up a
whole slew of properties all around one block
and totally transformed that whole neighborhood. Well, that whole D
neighborhood probably just turned into a C neighborhood,
thanks to that one investor. So D neighborhoods do
offer a lot of potential for increase in value. And I still think I’d much
rather buy a few properties in a D neighborhood than I
would in an A neighborhood. That’s my personal preference. I’d love to hear your thoughts. Please leave them in the
comments section below. And please subscribe. There’s the big subscribe button
right there, click Subscribe. We publish videos
multiple times a week. We’ll see you back here
next time, everyone. Go out there, take action, and
become a real estate investor.

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