Hi all, im considering an investment property(currently own 3 props, 2 rentals w/ one that i am managing 1 myself and one managed by my mother). I’d love to have your thoughts on these numbers.
There is a 3-unit prop I am considering. It could be done for 200k+closing costs. It is currently generating about $2400/month. Cash flow wise, this actually is a decent deal for the location; there are not many multi-units available in the neighborhood, and to cash flow ~2400 it would take roughly 2x single family homes that list right now for around 130k-190k.
My reservation about it is that the comps SOLD are tough to read. Basically, the 2004-2006 sales were 130k and 145k. Then there’s one summer 2007 “anomaly” that sold for 238k(peak of the bubble); i dont consider this valid, as it was at THE most inflated period of recent R.E. history. So as a standalone property, it seems potentially overvalued.
However, as an investment, it would generate around 14%, which is pretty good from my perspective.
What do you guys think? I have thoroughly searched the area, and while there are multi’s around, this one suits my needs best and really doesnt have a good viable alternative. I wouldnt be overextending myself on it, financially.
So, my option are: take what MIGHT be a bit of a hit in the value dept in exchange for good cash flow? Or potentially hold out for several individual props and hope they are close together? Basically, as a long term investment, it still looks good, but as an individual transaction, the prop is not exactly a “steal”.Thanks for your opinions.