There’s nothing I love more than building my portfolio around C class properties. C class properties produce the highest return on investment, and are largely untouched by economic downturn. However, recently I’ve started implementing a new strategy—adding a few B class properties to my portfolio.
I understand that the neighborhood classification system can be confusing. If you need a refreshed on the distinction between neighborhoods, check out this post. Personally, I love to build my portfolio around C class properties—they are the backbone of everything I do in real estate.
But recently, we have started implementing a new strategy in our real estate business—adding a few B class properties into our portfolio. This is not to say we are totally rebuilding our strategy; we’re not. We still focus on C class properties, just not exclusively.
B class properties will have a slightly lower ROI, yet higher equity and appreciation. Also, purchasing a property that is worth $80,000 instead of $40,000 is a fast way to increase your personal net worth. However, I’m not talking about B class properties in B class neighborhoods.
This strategy consists of finding a rare gem—a C class property in a B class neighborhood. I’m looking for properties I can still purchase under market value, add value in order to increase my equity position, and still get a high ROI. Again, I’m not suggesting redirecting your strategy altogether. I still love C class properties. But in a portfolio of 30 properties, it might be smart to consider purchasing 3-5 B class properties.
Ready To Build Passive Income Through Rental Real Estate?
Ready to talk about your goals? We're here to show you the tools and teach you the process to begin earning legacy wealth for you and your family.
