Inherited a 3 family house
Hi all, I recently inherited a 3 family home that needs A LOT of work ( home is from the early 1900's) . There is no mortgage, the house is fully paid off . Two of the units are being rented but WAY below market value. While the other unit has a squatter 😕. I see potential especially since it's in a very desirable neighborhood in Brooklyn. Only thing is it's in need of many costly repairs (guesstimate 400k+) and this isn't something I saved up for as I was not in the market for a home just yet. What I would like to know is where should I start aming my focus to make this a profitable home to have an income property or should I just scrap the idea and sell it.
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@Andrea Sydle it sounds like a great value add opportunity! I would keep it and make the necessary improvements to get it operating at it's best. My first step would be to get the squatter out. If you can do it yourself quickly and easily, I would. Otherwise hire an attorney to evict them. Then, I would leave the other two tenants in at the same rent while rehabbing the newly vacant unit. Even though its below market rent, a little cash flow will help while you are improving the 3rd unit. If you dont have the cash for the rehab, consider taking a hard money loan against the equity in the property to fund the rehab. Get that 3rd unit rented at market rate. Then work on getting the other two units to market rate. Then refinance out of the hard money loan into a long term loan. Good luck!