EP327: Try Adding a Few B Class Properties to Your Portfolio
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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.
On this episode of Investing in Real Estate, I’ll share why you might want to consider purchasing some B class rental properties. I’ll talk about equity, ROI, and the appreciation you can expect to receive. I’ll also share the secret that wealthy people know about owning real estate! Don’t miss episode 327!
More About This Show
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, Natali and I have started implementing a new strategy—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.
On today’s show, I’ll go more in depth about this strategy, and why it might appeal to you. I’ll talk about how much to spend on a rehab, and why building your net worth is so powerful. It’s all here on Investing in Real Estate!
If you’re ready to begin building a passive income through rental real estate, book a FREE call with our team today. We’re ready to talk about your goals and want to help you learn more about earning legacy wealth for you and your family.
On this episode you’ll learn:
- How much should you spend on a B class property?
- What kind of ROI should you aim for on a B class property?
- Why is building your net worth important?
- Why do B class properties become foundational properties in a portfolio?
- And much more!