EPISODE 003: Part 3 of 3 Big Decisions Investors Must Make: Understanding Property Classes
Categories: Strategy & Tips
Description & Show Notes: In this episode, we wrap up our 3 part Foundation series and look at Property Classes, what separates them from each other, and how to use that ranking system to help you know what to buy and what to do with it. I also go through an example of how I used the "classes" framework to decide on renovations for a 12 unit apartment building and how things went totally sideways with this project during the recession and what I had to do to keep it from falling apart.
Property Classes: Class A: Best properties, best floor plans, best neighborhoods, but may be too costly to hold as rentals Class B: Nice, clean, & safe. Nothing flashy, but easy to rent and maintain. Class C: Obsolete floor plans, declining neighborhoods, less financially stable tenants. Class D: Lowest income tenants, but often these have the highest rental returns.
Which is the best class for long-term holders to end up in and which is best for flippers to shoot for?