Question:
I have a chance to buy a great house at a low price and on excellent terms. The only fly in the ointment is the deteriorating neighborhood it is located in. Should I go ahead and take this bargain, or wait for something else?
Answer:
Ask yourself, “Why am I so smart, and why is this present owner so dumb?” If this is truly a bargain, doesn't it seem reasonable that the current owner knows it too. Maybe he HAS to give a beautiful deal in order to sell the property at all! Changing neighborhoods can sometimes cover up a more serious problems. Why are they changing? What will they be like in 5 years? On the other hand, bargains can often be found when a change is taking place.
Just because a neighborhood is changing it doesn't mean that values will automatically take a plunge except for the immediate short-term. What is more important is whether the properties in these areas are still viable as investments. If they are, then go ahead. But look before you leap. If the neighborhood is beyond repair, stay away. They rarely improve. The property probably is not the bargain it appears to be.
Perhaps it would be better to just get an option when wholesale this property to someone else.
