What unique strategies must real estate investors employ when acquiring distressed "D-class" properties?

 

In this episode, seasoned real estate investor Guido Nunez shares his approach to investing in and managing D-class apartment complexes. With hundreds of units under his belt in California, Arizona, and soon Texas, Guido has honed strategies for securing financing, finding quality service providers, engaging positively with residents, and adding value through modest upgrades. He explains how to determine a property's class level based on metrics like price, condition, amenities, and neighborhood quality. Guido stresses the importance of aligning with reliable partners and service providers willing to work in distressed areas. While value-add upgrades are limited for D-class, security, cleanliness and community spaces make a big impact.

 

 

[00:01:00 - 00:04:00] Evaluating Asset Class Levels

Price, cap rate, condition, amenities indicate class

Consider whether a D property in a C neighborhood

Estimate repositioning potential and capital needed

 

[00:04:00 - 00:07:00] Securing and Managing D-Class Properties

Lighting, gates, security are first priorities

Engage residents positively about improvements

Upgrade courtyard and common areas on a budget

 

[00:07:00 - 00:10:00] Sourcing Service Providers for D-Class Areas

Connect constantly with local maintenance crews

Find partners already working in those neighborhoods

Check county and city ordinances for investor-friendliness

 

[00:10:00 - 00:13:00] Neighborhood Factors Impacting Investment Decisions

Scout crime rates, schools, demographics

Total quality score indicates class level

Must see a path towards growth and value

 

[00:13:00 - 00:30:00] Selecting and Vetting Investment Partners

Get to know potential partners for 12+ months

Attend conferences and meetups to make connections

Ensure proper alignment for long-term holdings

Book recommendation: Rich Dad's Cashflow Quadrant - Rober Kiyosaki

Who inspires Guido?: Himself 10 years in the future.

 

Quotes:

"If you're not a people person, don't do this, especially if you're going to be an active investor." - Guido Nunez

"I try to stay away from [apartment buildings built in the] 70s and up." - Guido Nunez

 

Connect with Guido:

Website: https://thew2investor.com/

 

Apply to Invest with Taylor at www.investwithtaylor.com

 

Track your wealth for free with Personal Capital, go to www.escapingwallstreet.com

 

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