WARNING: FOLLOWING THIS METHOD WITHOUT DOING OTHER RESEARCH IS AS SMART AS PLAYING RUSSIAN ROULETTE.
I’m on the road visiting different markets and looking for my next acquisition.
I came across a couple locals and they started talking about this “terrible area” that has been crime ridden for a long time. I asked where it is and they told me it’s on top of a hill that overlooks downtown.
Reeaaalllyyy, I think. Hmm…I inquire further.
Turns out it’s got breathtaking views of downtown, it’s close to some major employers and it sits high up on a hill. If there’s one thing I’ve learned it’s that the rich people want the good views and they want to go higher up to get them.
Take a look at your city and see if that proves out. I bet it does.
So then the question because, WHY? Why did it become a bad area? In this case it’s because of some political moves that had unintended negative consequences. There’s now a new political regime and there’s some ripples of it being turned around. In fact, it has a 4-star restaurant that is nestled between a couple crime-ridden communities.
Sounds like a good opportunity to get in before the gold rush begins.
I’m driving over there tomorrow to check it out. It interests me for three stupidly simple reasons.
- Good views of downtown
- High up on a hill or mountain
- Close to downtown
Please, PLEASE don’t think this is the way to evaluate if a submarket is ready to emerge. Because it ain’t. For that you’ll want to look at jobs, one and five year job trends, supply vs. demand, job diversity, new construction of McDonald’s and WalMarts, as well as other factors.
This is just a, well, stupidly simple way of potentially uncovering a gold mine. Or, a scary dud and money pit. Proceed with caution on this post (I hope I’ve put up enough disclaimers!).
Either way, it’s worth a drive to check out.