What Neighborhood Is Good And Safe???
Hi guys!
Wanted to ask a question that was bugging me for the past few weeks:
Lets say I want to start expending area of my investment into the new territory (new county or town. How would I know what area of the new town is good or bad, more or less dangerous?
In the large cities in N.J. such as Trenton and Newark there are a lot of foreclosure opportunities but most of them located in the war zones.
How could someone not closely familiar with the neighborhood isolate the areas of the interest for the investment (besides the price of the properties)?
Is there a common demographical service that may be used for it? How accurate would it be?
Thanks,
PerlUser.
PerlUser,
I know the deals are good in these areas. I considered the same questions as you at one time. If you don't feel safe walking in the neighborhood at night then you shouldn't pursue the deal for yourself.
I started looking at these differently because If you are good at evaluating the deal, start flipping these deals to other investors and let them deal with the exit strategy.
Some other investors will answer the above question differently then you. I used this technique in Camden, NJ and I found more investors then I can deal with that will take these deals from you.
Get involved with the local REI groups in the area and you will find people that do deals the the bad citys.
I found this site while searching for something the other day. I have not registered (paid) for anything, but the ROI Index info is interesting. It shows (according to the website) how hot a particular county or area is. Thought it was worth sharing.
http://www.foreclosurefile.com/search/index.php
cb
[ Edited by savin4theislands on Date 04/27/2004 ][ Edited by savin4theislands on Date 04/27/2004 ]
Statistics are very dangerous to rely on as sometimes the statistic while correct does not disclose what is really happening.
For example the demographics on designated site show the nation with gradients of foreclosure activity. You must remember as a participant in the occasions you are not really concerned if there is a lot of foreclosure or a little. You are concerned with the reality surrounding each one on which you work. An area of high foreclosure activity may merely be a sympton certain banks not utilizing proper Loss Mitigration tech. Or it can be reflective of the loss of a major industry or an industry that is no longer competitive. You may have a terrible problem in the lower economic levels but the middle management they are zipping along in fine style. Sometimes an industry discards an obsolete factory or dumps a line of goods no longer applicable to their market. The Middle management are merely shifted to managing the new tech now coming on line from a slightly different source.
Now assume you are working preforeclosures. Would you work the lower economic levels where there is no ready group of buyers or would you work the middle management housing areas where the foreclosures are tied to the usual like divorce, over spending. clobbering yourself to fund a grandchild to college. An illness that has slipt out of the coverage of health plans. Or a job change that requires a reduction in salery to obtain a larger chance at executive heaven. Whatever. You will of course work the area in which there is a demand.
I work War Zones but my purpose there is not imediate profit. It is to effect change. I want to eliminate absentee landlords. I want to gather the properties back into the hands of the people who live in those areas. Slums are created by absentee landlords. Transfer ownership of the properties multiple and single back into hands of those who live there and you will see the termination of a slum, a cease fire as to the war zone and people with pride of property ownership and of the area itself.
Money can be made but it calls for involvement which is something that cannot be legislated nor assigned. You have to have a desire to do it. Perhaps you like to tackle the impossible improbable task that nobody gives a damn about. Or it may be some strange calling to help your fellow man. I suffer from neither. I enjoy it. But then I spent a lot of time in strange locations with very warlike people and grew to love them. Working with Montenyards in the Highlands of Vietnam or living and helping in the survival of a bunch of wandering Bedoins is similar and an excellent education. Attitudes present in those most primative cultures are also present in our depressed and dangerous areas. I have had a gun stuck up my nose in Vietnam, in Hmong territories and among Igorots in Philippines. Also in South Central here in LaLa land. The answer to that was always constant. For God Sake Dont Sneeze. Or laugh. You can effect a change and you can be rewarded. They go together.
I recommend the work highly. It is on occasion scary, but the knowledge gained a balance for the rest of your life.
Lucius 8-) 8-)
Ok, so this has every possibliity of getting me banned for raving but I gotta get it off my chest and Perluser, please do not take this as a personal attack since I really do not know anything about you other than your address.
What is this thing that people have for safety? The truth is that we live in the safest society in the history of the planet. In fact we are so safe we are like children who have been kept in a padded room, afraid to go out in the world because its dangerous.
So instead we hole up in nice quiet suburbs like Englishtown. Now Perluser has cast his/her eyes afield looking for investment opportunities and found the NJ countryside to be pretty boring. No great and obvious opportunities because all the new construction is done by big companies the shopping mall has already been built and there aren't enough poor people to have much of a forclosure list. And the one run-down house in town is owned by this crazy old excentric woman who's not interested in selling.
Suddenly the excitement of Trenton and Newark looks interesting. Poor people abound, opportunity lies around every corner. There are old run-down buildings to renovate. Which those big companies cannot do because each unit is unique and they are set up for factory runs. Who knows where this will lead, to Philladelphia? To New York? Bright lights, big cities?
But theres still that nagging safety thing. The city is dangerous, there are poor people there and people who are not like us suburbanites who hang out at the Battlefield Country Club.
Yes, Perl. There is danger in the city. There is also opportunity and excitement and diversity.
But the real danger in the city is not crime. There was this wonderful study by somebody at the University of Pennsylvania not too long ago (I know terrible reference and you'll have an impossible task to track it down.) They added two risk factors together 1) your odds of being killed by someone you don't know and 2) your odds of being killed in a car crash. And what they found was that the most dangerous places to live were semi-rural areas like Englishtown. But no-one considers the risk of dying in a car crash as significant so all those suburbanites go dashing about in their SUV's worrying about how dangerous it is in the city instead of concentrating on their driving.
The real danger in the city is that you will see the world in a different way.
But even more than that the danger is that when you go into the city you will carry the virus of the suburbs with you. Suddenly rows of look-alike houses will spring up. The neighborhood store will be run out of business by a Wallmart. The city, in an effort to cater to this blight will start passing laws to make the city more and more as vanilla as the suburbs. Yuppies, the children of the suburbs, will descend like a plague of locuts only to depart when their first child turns six and they flee back to the suburbs lest their children actually have to go to school with people who are different from themselves. Empty nesters will buy condominiums where they have the illusion of a neighborhood with none of the actual responsibilies.
Do us urbanites a favor. Stay home.[ Edited by commercialking on Date 04/28/2004 ]
"But theres still that nagging safety thing. The city is dangerous, there are poor people there and people who are not like us suburbanites who hang out at the Battlefield Country Club."
"Yes, Perl. There is danger in the city. There is also opportunity and excitement and diversity. "
"But the real danger in the city is not crime."
"The real danger in the city is that you will see the world in a different way."
Ok, commercialking. Don't take this personally or anything, but you have no idea about what its like Real Estate Investing in New Jersey - this is obvious from your post.
Not everybody in New Jersey belongs to a Country Club, not everybody is a "suburban-ite", not every part of New Jersey is a development of "look-a-like" houses... The suburban population does not look down on the "poor" people... Do you know what you are doing? We, in New Jersey, learned that in 3rd grade - its called a STEREO-TYPE! You can't stereo-type like that...
Perl posted this message to get an idea of where to expand New Jersey investing... There IS a problem with investing in war zones in New Jersey as well as with war zones in all parts of this country... A big problem is when you are rehabbing a house in a war zone, you run the risk of getting it destroyed before its complete... People break into these houses and destroy whatever they can... I know of specific investors that this has happened to in the "war zones" of Trenton, Newark, and Irvington... I don't think that they are afraid of "poor people" as you refer to them as, its not that at all... They are afraid, as would any investor be, of getting their investment destroyed... Understand?
New Jersey Investors are not afraid of, as you say, "see(ing) the world in a different way"... They are not willing to increase their risk of their investment being destroyed in these "war-zones" when they can make as much or more profit in more sub-urban areas...
I have read your posts and your replies to many posts. I am impressed with your knowledge to this point. I think you have a wealth of knowledge that is worth sharing...
HOWEVER,
My response to your reply here is stay in your urban area, think down of our suburban-ites, do what you have to do - but don't sit there and tell everybody you are better than any given New Jersey suburban investor... No need...
Pearl -
I agree with the post above that says that if you feel comfortable walking around at night, tat's where you should stick with your investing... There is money to be made all over New Jersey, no need to enter into the war zones...
Good Luck Pearl!
[addsig]
Wow!
I have never, indeed, expected such an outburst from Commercialking! I would say it struck a nerve or two of mine.
I do, however, have to express my appreciation to Mattfish for writing a response which is very close (if not the same) to what I would say, assuming I can get there first.
I may word a question wrong from time to time, but I have never said that it’s NOT good or DANGEROUS to invest in the War Zones. I understand perfectly what Lucius is talking about. Bringing change to the neighborhood is the best reward any decent person may wish for.
Commercialking, no one here is talking about the DANGER or CRIME of the large cities in the way you, mister, understand this terminology. Just for your information sir, I have got to this God blessed country 18 years ago and have leaved in the neighborhoods you will probably never set you foot even in bright day light. I know what N.Y. Harlem looks like at night and I am also familiar with Bushwick area of the East New York in Brooklyn.
I have done my share of low paying jobs and I understand perfectly what it takes to put food on the table working 3 jobs. I have being robbed in subways at the knife point coming home from the late shift. I have also witnessed a drive by shootings. Yes, my hometown is a “semi-rural areas like Englishtown” which you seem to dislike so much and I do drive an SUV. It took me 18 years of hard work to get here and I can appreciate what other people go trough in foreclosure.
Do us all a favor: don’t assume anything bad about people who live in the communities with the “Battlefield Country Club”!!!
And Commercialking, please don’t take this also as a personal attack, but since you are residing in IL 1500 miles away, you would be the last person who can lecture us (NJ investors) on where and how to do our RE investing. As Mattfish said above: “you have no idea about what it’s like to do Real Estate Investing in New Jersey - this is obvious from your post”
PerlUser.