Should I buy this home in a transitional neighborhood?
July 28, 2008 9:55 AM Subscribe
I'm looking to buy a house. I live in Denver's Baker neighborhood and I'm a looking to stay in the area. I've been looking for about two months and I've let two places slip through my fingers that I thought were great...
One went in a heartbeat and I needed to get my head around the amount of money they wanted - it was lovely, but more than I was prepared to spend at the time. The other was expensive for the location and had a few challenges, but great overall. I put in an offer of what I thought it was worth to me. On the same day (after 30 days on the market) there were two other offers presented - I was the low one.
Now I've found my dream. Truly, it's stunning. It was gutted to the studs and finished amazingly well. The problem is what's next door. There are five low/small former rental units, three of which are currently on the market for sale at just $48k. They are currently sad little places with no landscaping and just generally kind of a ghetto feel to them. The rest of the block is ok, not great, not horrid. There is one other home that's clearly been recently renovated. Gentrification is slowly moving through the neighborhood - and I'm seeing positive signs of several real estate agents buying and flipping recently.
The home is at the top of what I want to pay, but it's a great deal on a per square foot basis. The reality is that my agent and I both agree that if not for the place next door this property would have been gone within the first week on the market. It's been on the market for nearly three months.
Have any of you bought into transitioning neighborhoods - how did you fair? How likely do you think these little places are to be improved? Am I stupid for falling for this place?
One went in a heartbeat and I needed to get my head around the amount of money they wanted - it was lovely, but more than I was prepared to spend at the time. The other was expensive for the location and had a few challenges, but great overall. I put in an offer of what I thought it was worth to me. On the same day (after 30 days on the market) there were two other offers presented - I was the low one.
Now I've found my dream. Truly, it's stunning. It was gutted to the studs and finished amazingly well. The problem is what's next door. There are five low/small former rental units, three of which are currently on the market for sale at just $48k. They are currently sad little places with no landscaping and just generally kind of a ghetto feel to them. The rest of the block is ok, not great, not horrid. There is one other home that's clearly been recently renovated. Gentrification is slowly moving through the neighborhood - and I'm seeing positive signs of several real estate agents buying and flipping recently.
The home is at the top of what I want to pay, but it's a great deal on a per square foot basis. The reality is that my agent and I both agree that if not for the place next door this property would have been gone within the first week on the market. It's been on the market for nearly three months.
Have any of you bought into transitioning neighborhoods - how did you fair? How likely do you think these little places are to be improved? Am I stupid for falling for this place?
Usually I'd say you're better off buying those little ghetto places and making a mint off the ensuing gentrification. It's generally better to buy the ugliest house versus the prettiest house. But now, you're in home-love, and that's hard to fight.
Are the units owned by a single owner? That might mean they get fixed up as a lot, which could be a good thing. Perhaps you could also find someone interested in flipping those little sad places....which would help you longer-term.
How long would you see yourself in the house? If it's at least four to five years, you could decide if you'd bet for the gentrification march to continue. If you're in it for the long haul, you have a lot of time to see your investment pay off.
posted by answergrape at 10:22 AM on July 28, 2008
Are the units owned by a single owner? That might mean they get fixed up as a lot, which could be a good thing. Perhaps you could also find someone interested in flipping those little sad places....which would help you longer-term.
How long would you see yourself in the house? If it's at least four to five years, you could decide if you'd bet for the gentrification march to continue. If you're in it for the long haul, you have a lot of time to see your investment pay off.
posted by answergrape at 10:22 AM on July 28, 2008
On home purchase threads one usually finds someone quoting the nostrum that you should opt for a low-end place in the best neighborhood you can afford. This favors answergrape's first option.
posted by Clyde Mnestra at 10:26 AM on July 28, 2008
posted by Clyde Mnestra at 10:26 AM on July 28, 2008
Response by poster: answergrape - as you know - I'm, in theory, all about the buy low-sell high maxim, but I'm now of the "I travel too much to deal with all this crap" and am willing to pay for the fact that someone else did the heavy lifting for me.
And my hope is 3-4 years at least, but anything is possible. I love Denver and could see myself here for a long time, but I'm realistic in the fact that some things are beyond my control.
Clyde - This is *the* neighborhood for me. And a low end place here can be a real hovel - I'm not willing to do the work myself. From previous home ownership I know the stresses this can put on a person, not to mention any relationship. I want a move in ready home. Thanks though.
posted by FlamingBore at 10:38 AM on July 28, 2008
And my hope is 3-4 years at least, but anything is possible. I love Denver and could see myself here for a long time, but I'm realistic in the fact that some things are beyond my control.
Clyde - This is *the* neighborhood for me. And a low end place here can be a real hovel - I'm not willing to do the work myself. From previous home ownership I know the stresses this can put on a person, not to mention any relationship. I want a move in ready home. Thanks though.
posted by FlamingBore at 10:38 AM on July 28, 2008
Too bad you just missed the weekend and you can't go see what the area is like on Saturday night. I find people that live in places like that here blast loud music till all hours, roar their cars at all hours, and are loud and obnoxious. I wouldn't buy my dream house next to that. I would buy the worst house in the best neighbourhood I could afford because I'd be buying peace. You're not stupid for falling for the place, of course, but you are also buying into a neighbourhood. That said, I don't know that particular neighbourhood or building, so maybe check it out some more, e.g. with other neighbours and it would be nice to know if the cops consider it a trouble building.
posted by Listener at 10:38 AM on July 28, 2008
posted by Listener at 10:38 AM on July 28, 2008
Response by poster: I've been living in the neighborhood for eight+ months. I've driven by it on the weekend during the day, in the evening and at midnight. There's one house at the far end of the block that was playing music lound enough to be heard from the street - but that wouldn't impact me at this place.
posted by FlamingBore at 10:58 AM on July 28, 2008
posted by FlamingBore at 10:58 AM on July 28, 2008
There's a lot to be said for "I like it as it is" and "I could see myself here for at least a few years." Sounds like you're already convinced. Nothing wrong with that.
Do you know if there's an active neighborhood association? In Roger's Park, the "retired ladies who peer through their curtains" were FAR better security and knew more about the goings-on of the neighborhood than anyone else. They were like the babushka mafia, and they knew where ALL the problem houses and owners were. A few of them around would make me feel in touch with my neighborhood.
My only other concern would be the ratio of owners to renters; sometimes that impacts the long-term valuation of the area.
posted by answergrape at 11:35 AM on July 28, 2008
Do you know if there's an active neighborhood association? In Roger's Park, the "retired ladies who peer through their curtains" were FAR better security and knew more about the goings-on of the neighborhood than anyone else. They were like the babushka mafia, and they knew where ALL the problem houses and owners were. A few of them around would make me feel in touch with my neighborhood.
My only other concern would be the ratio of owners to renters; sometimes that impacts the long-term valuation of the area.
posted by answergrape at 11:35 AM on July 28, 2008
We have a fair number of rental triplexes in our immediate locale and because of them, we were able to afford a nice house on the edge of a good neighbourhood. In the past 10 years the value of our place has risen by a greater percentage than those in the nicer part of the area.
I've seen a lot of tenants come and go and find that the noisiest tend to move on pretty quickly (knock on wood). You could live in a more expensive district and still have lousy neighbours.
posted by bonobothegreat at 11:46 AM on July 28, 2008
I've seen a lot of tenants come and go and find that the noisiest tend to move on pretty quickly (knock on wood). You could live in a more expensive district and still have lousy neighbours.
posted by bonobothegreat at 11:46 AM on July 28, 2008
I lived on 11th and Acoma in the mid 80s (Just north of Baker) and the neighborhood was pretty dicey back then but it was still awesome. Baker always seemed to be in transition back then too which I never understood because it really is a great neighborhood. From what I've heard from my Denver friends, Baker is the hot neighborhood right now so maybe you're in luck.
posted by KevinSkomsvold at 11:51 AM on July 28, 2008
posted by KevinSkomsvold at 11:51 AM on July 28, 2008
What sondrialiac said. When we were looking at flats in London, an agent was taking me to look at a new build in a shiny new complex with terraces, a roof garden, a gym - whatever, all that posh crap they're still pouring into East London at a vast rate.
"Now," he said, "the only bad point is that there's a housing estate across the road."
"Dude," I said, "do I look like the kind of asshole who doesn't want to live next door to a housing estate?"
While we were there, the value of the property increased 33% in two years. You'll be fine.
posted by DarlingBri at 12:51 PM on July 28, 2008
"Now," he said, "the only bad point is that there's a housing estate across the road."
"Dude," I said, "do I look like the kind of asshole who doesn't want to live next door to a housing estate?"
While we were there, the value of the property increased 33% in two years. You'll be fine.
posted by DarlingBri at 12:51 PM on July 28, 2008
I just contracted on a property in Baker. Sure there are some ghetto rentals in the area, but there are some real renovations being done there as well. My property is one of them. I wouldn't worry about having a bad property next door. Its probably on the slate for getting gutted and renovated as well. I would be more concerned with how the overall neighborhood fits into your plan.
Also, from personal experience, I recommend that once you find a place that you want, immediately (within a day or two) put an offer on it. The worst that could happen is that you end up not liking it for a real reason (which may come up in the inspection) or any other reason (which you can blame on the inspection) and you're out the inspection fee (you get the earnest money back). If you really want a place, hemming and hawing over it for a few days is just going to let other people get in on the deal and then you'll end up bidding against them. At that point, you may still get it, but you'll end up paying more in the long run (by beating their bid, etc...) then by losing the inspection fee.
posted by kookywon at 1:09 PM on July 28, 2008
Also, from personal experience, I recommend that once you find a place that you want, immediately (within a day or two) put an offer on it. The worst that could happen is that you end up not liking it for a real reason (which may come up in the inspection) or any other reason (which you can blame on the inspection) and you're out the inspection fee (you get the earnest money back). If you really want a place, hemming and hawing over it for a few days is just going to let other people get in on the deal and then you'll end up bidding against them. At that point, you may still get it, but you'll end up paying more in the long run (by beating their bid, etc...) then by losing the inspection fee.
posted by kookywon at 1:09 PM on July 28, 2008
Clyde - This is *the* neighborhood for me. And a low end place here can be a real hovel - I'm not willing to do the work myself. From previous home ownership I know the stresses this can put on a person, not to mention any relationship. I want a move in ready home. Thanks though.
If this is *the* neighborhood for you, and you don't want a lower end place, not clear what advice you're seeking: this place, as against another similarly upper-end place in the same neighborhood? Hard for anyone else to judge, without you giving the kind of detail that could cough up your find.
My only point is that your position -- higher end place in a transitional neighborhood -- is traditionally thought to be one of the riskier ones. May yet be worth it for you, but that's for you to judge.
posted by Clyde Mnestra at 1:58 PM on July 28, 2008
If this is *the* neighborhood for you, and you don't want a lower end place, not clear what advice you're seeking: this place, as against another similarly upper-end place in the same neighborhood? Hard for anyone else to judge, without you giving the kind of detail that could cough up your find.
My only point is that your position -- higher end place in a transitional neighborhood -- is traditionally thought to be one of the riskier ones. May yet be worth it for you, but that's for you to judge.
posted by Clyde Mnestra at 1:58 PM on July 28, 2008
This thread is closed to new comments.
If the properties are vacant, you might try a little volunteer amateur landscaping on them, in order to improve their "curb appeal", and maybe get some good neighbors.
posted by Citrus at 10:21 AM on July 28, 2008