When is it too early to put my Brrrr into play?
Approximately 6 months ago I purchased a 12 unit brick garden style apartment building that was mismanaged and needed to be properly maintained. The building is a half a mile from a very large Massachusetts College and half a mile in the other direction to a large hospital.
I have been searching for over a year and a half to find the right building so I knew what my numbers needed to be and exactly What I looking for so I made an offer the first hour this building was on the market. Literally 15 minutes of negotiation they dropped the price by $250,000??? After I put the building under agreement they had dozens of people reaching out to them about the property. They do not know what they had.
I paid 1.2 million, 100k per door. Some units in good shape, others not so good. All tenants at well, paying anywhere from $900-$1000 per unit for two bedroom apartments proximately 750 ft.² heat and hot water included. We can very lucky the first month we bought it we had one vacancy that we totally renovated new floors new granite countertops new Windows new appliances. Total cost of renovations $6000 and every month we've had people move out knowing that the new owners were going to put up with the same crap that the old owners did.
The problem tenants basically left on their own accord which was awesome. We now have renovated six units in five months with my wife and I doing 90% of the work ourselves and we are well into our 50's The rents are now $1325 per month, a very nice boost from the $900-$1000 range. The six tenants who remain have all had their rent increased to $1200 a month with minimal renovations done. My question is when is it too soon to start considering refinancing and buying something else?