Okay so I've been soaking up knowledge from every source available over the last few weeks and I just can't get enough. There is a local building that I know for a fact many people have been wanting to rent out, but the last owner would not do it. It has 3 units, not sure if that includes the storefront or not. Anyhow I know that could be a good possible rental for me to start out with. However I was looking at the sale price and it was under $100,000, but I know its bank owned so its possible they would accept less since I think it was a forclosure. I didn't have it appraised yet, but according to the gis the aftermarket value was $250,000 since its right on a river. It honestly does not need that much work on the inside from what I can tell. I know the storefront needs to be re-painted at least. I really want to snag this up myself! My thing is, I've been retaining knowledge, for awhile now, but have not come up with an actual plan myself. I'm just a little confused on the process. Do I check it out first, make an offer, then have it inspected and apraised, and then find financing for it? I would most likely need a hard money lender since my credit is not good, and I don't have money to put down. I feel like its a really really good deal though. I want lookup and see if I can find some of the comps today, but this building is really different from others around it as it has a couple rental units and the store. I could even wholesale this place if I really wanted to! I may be jumping the gun, but I learn better by doing then just reading all the time. Need some advice!
I wouldn't even mind renting this place out, but I don't know if I can afford the conventional financing with the vacancy of the property up front until I find renters or even live in 1 of them myself. The reason why it would be a little out of my price range up front is that the property taxes are high for being on the water(over 5k)
Hello Dylan and welcome to Biggerpockets.
I feel your excitement. The first thing to do is have somebody with experience, like a contractor, walk through the property with you to give you an expert opinion on its condition. The important things to find out before purchasing a property are, (1) is the roof in good shape?, (2) what kind of plumbing does the property have; is it galvanized or copper?, (3) how old is the electrical panel? and, (4) is the foundation raised, or flat? It is important to know so you can evaluate your repair costs accurately. Also, have you applied the 50% rule to evaluate if the numbers work out. Meaning, will you have cash flow after you account for mortgage, taxes, future repair costs and vacancies? I can not stress enough how important it is to know your numbers, before buying any investment property.
Check it out first, especially if its [email protected] W had great points...also find someone who's familiar with the codes in your area...example - do they allow cast iron pipes to connect to PVC or other little things we may not think of at first but can cost $$$...I think its safe to say most of us (myself included) underestimate rehab or prep costs at first so def have someone go through with you...
Talk to a local bank, they may give better rates (one we use allows 15% down) than larger banks for investing...also find out how its all set-up (residential, commercial) and how it may affect loan...
My brother manages a very similar place with apartment/storefront...he turned basement space into storage units if looking for extra sources of income...
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