I’m a newbie. My husband has been doing research and reading for a few months, but I just started this week. Well, a realtor hooked me up with MLS and I just found a 2 family property that went on the market today for $106,000. The upstairs apartment is rented and the downstairs NEEDS a kitchen and a bathroom. I know these are both costly repairs, but in my area just the land is usually $100,000. The next lowest price 2 family in that city is $249,000. Also says that it was in the process of being rehabbed and many of the materials come with the property. In my area, if this is the deal it sounds like, it’s probably already gone.
It’s just killing me to know that I don’t have the knowledge to make a true informed decision on this yet. Half of me wants to make an appointment to see it anyway. It’s defintely incentive for me to read the books and boards as quick as I can so that I don’t miss the next one! I should just let this one go for now…don’t you think? :-\
Sounds like a no brainer deal to me. If you think you can do it you may be able to. If you know you can do it you will get it done. If you give up before you even start you for sure will not do it. What will be your excuse on the next deal. Too little money, not enough time, bad credit. Go see it tomorrow with the Realtor and a check in your hand and know that you can do it if you set your mind to it.
Sounds like the upstairs rent will probably even make the mortgage payment wile you rehab the other unit. You can get the fixup funds some where. Just go do it. Find a way and make it happen. I wish I could type faster as I would tell you a whole lot more reasons why you should not let this one get away.
Do your home work to make sure of the rehab costs and the after rehab value but get it under contract first,.
Putting a kitchen and bathroom in shouldn’t cost more than $20,000. That would leave you with $126,000 in the property that should be worth at least $180,000. Go look at that property today, right now. maybe yesterday. Even if you have to put an extra $20,000 over the cost of the kitchen and bathroom, it sounds like you still have a deal. Ask the realtor what the property should be worth if you fix it up. How much rent can you get out of it with both apartments rented? Even if you had to borrow $150,000, the payment on a 30 year note (P&I) wouldn’t be much over $1,000. Break even would probably be less than $1,500 after you include taxes, insurance and repairs. Get the property tied up with a contract, but have your contract have contingencies for inspections and financing. If the property does not pass your “inspections” then you don’t have to buy. That way the seller can’t sell it to you while you make up your mind.
WOW! $20,000 for a kitchen and a bathroom? Am I in the wrong business? I live in Dallas, TX and I would guess the kitchen and bathroom if working with bare walls and no appliances might be like $3,000-$5,000 for the kitchen depending on size and about $1,500 for the bathroom.
It depends on what you put in them. I added a bathroom to a house just off the M Streets in Dallas that I put a $1600 bath tub and a $600 shower, not to mention the other fixtures. In the kitchen in that house, we even had to take out the floor and replace some joists. IIRC the countertop for that kitchen was about $1500. All in all, we spent about $60k on that house, but it was beautiful when we got through with it.