4 Pack House Deal Opinion
I wanted to ask, as this is a bigger deal for me than I have done before and would love a second, third, fourth.... opinion.
4 houses - 3Bed 2Bath 1,895sf - 3Bed 2Bath 2,088sf - 3Bed 2Bath 1,913sf - 4Bed 2Bath 2,362sf
$750,000 for all 4 homes - $91 per sf
Homes have month to month leases at $1,450 each or $5,800 total
To bring them up to market conditions to sell would require $25,000 each (mix of HVAC, roof, paint, flooring, etc)
Average price per sf in the area is $135.
After renovations $750,000+$100,000 = $850,000 with market value of 8,258sf x $135 = $1,114,830... so potential profit $1,114,830 - $850,000 = $264,000 (less agent and government fees)
After $50k renovation, I could lease them at $1,700-1750 each or $6,800 total
Mortgage P&I at 6% with 25% down ($187,500) will be $3,372 a month.
Insurance is $4,800 a year of all 4 houses
Property Tax is $13,800 a year for all 4 houses
Monthly revenue - (not including maintenance or vacancy costs)
$5,800 - ($3,372+$400+$1,150) = $878 - $522 (PM fees) = $356 ($4,272 yearly)
After 50k in renovations to get them rental ready
$6,800 - ($3,372+$400+$1,150) = $1,878 - $612(PM Fees) = $1,266 ($15,192 yearly)
So, what would you do?
1) Buy them and don't touch them until the renters move out and fix them up then.
2) Buy them and flip them as each tenant moves out and sell them.
3) Buy them, fix them up for rental condition, and rent them at the higher rate.
4) Walk away