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Richmond Slumlord Watch describes The Goswami Scheme
11/12/2009 6:57 PM by John M
Richmond Slumlord Watch does it again, this time bringing to light what they call The Goswami Scheme:
Ok, “scheme” might be giving the Goswamis too much credit. Basically, their business model seems to work like this:
Buy dilapidated house in North Church Hill.
Sit on house for a few years, let deteriorate further.
Try to sell house three years later for a four-to-five figure profit.
I’m more jealous than anything
If they are selling at only a few thousand above what they bought it for, they are not making any money. Closing costs, title insurance, etc eat all of that up. Not much of a scheme if you ask me.
I think “scheme” is meant to be ironic. Regardless of whether the slumlords make a profit, that’s certainly their intent, and the neighbors and neighborhoods are victimized regardless.
As far as return on investments, I think most of them make their best cash flow by renting rooms and never fixing the places up. It’s an all cash business and renting a room for $100/week and 3-4 rooms per house is some serious money.
Once the places get condemned, they sit vacant until someone buys them out.
How much are the flops at Sugar Bottom? They seem to stay full.