Closed on my first property yesterday and at this point not still sure what I am going to do with it.
Its a 3 unit. 1-5br 2-3br.
Purchase price 65k
Rehab 15-20k
Rent 2450/mo est.
Options: Rehab, rent and refinance or rehab and sell.
I’m not so sure I’m the landlord type so if I go the rent way I would probaly look into a management company. I have no problem with the matinance stuff its just the people stuff I’m not so sure how well I would handle situations.
If I was to sell, is it better to have it occupied or vacant?
What would be a good calculator to figure out selling price? Would the 50% rule be a good way. Someone else told me investors look to get properties that they can get 15% back on their money. Not sure how to figure that way out.
I have a 24x26 3 story barn attached to the house. It was used for storage. When I first looked at the property it was full of stuff left there. The bank cleaned it out, but for a while now it has been used as a litter box for all the neighborhood cats. Does anyone have a way to get the smell out of such a big building?
Also a big thanks to all of you that post here I’ve learned a ton from all of you.
Congrats on your first deal!! If your numbers are accurate, this should be a great investment property. If you think you really need a management company or just don’t want to deal with managing it yourself, you should have plenty of room on this one to hire management. If you screen your tenants and price your units appropriately, you should do fine.
Are there any properties in your town comparable to yours so you can see what other people paid for something like yours? We all try to buy properties at big discounts from retail. I wouldn’t price yours to sell at that big of a discount.
You’ll probably get differing opinions on whether to sell with the building full or vacant. If you screen your tenants and put them on well structured leases at or very near market rent, it would probably look favorable to most people. In my opinion, if a building needs lots of work and the tenants are paying way under market rent, I’d just rather have it pretty much empty so I could do the work and get the rent up where it should be. If the building is in good shape and the rent amount is good, I’d rather have the tenants in place.
This sounds like a great one to buy and hold. Let us know what you decide.
Thanks Justin.
I got comps from the city the building is in but the values have a huge range. Its not a big city and there was only 11 multies sold in the last year on the MLS. So I really didn’t feel it gave me a firm number I was looking for.
Another question:
I financed thru a lender and there is 6 months of seasoning on the note. I am not 100% sure I understand this, at the closing they said there was no early payoff penalty.
Can I refinance through someone else right away?
If I had cash to payoff note could I payoff note than refinance right away?
Just once I get done with this most of my cash will be tied up in it and I will have to sit on the sidelines for 6 months.
Trying to figure out a way if any to get my cash back sooner. I can see now another reason people use hard money.