Short sale 3 Family thoughts on purchase

4 Replies

Hello BP

I took a look at this propery last week, asking price from the bank is 24.9K. It looks to me like it could have been a single family at one time, turned into a 3 unit. There are 3 electric meters on the side of the house. One furnace. Building needs a full rehab, even though one person is living in it. This is a C neighborhood.

Building has leaking pipes in the basement, built in 1910, all 1 bed rooms, 1 bath, old style windows, no insulation, needs new roof, 3 furnaces and the list goes on. I brought a person I know with me who does handy man work for a living and his thought were 50-60k to rehab. Avg sale price for comps is 49k with a high of 90k and this from only 4 homes ( on one website).
Taxes est at 6k, plus bank I deal with does not do contstruction loans on non owner occupied.
Rent would be in the 600-650 range.

Hope that's enough info, I will likely pass on it.
Thoughts so far?

Thanks to all.

What is the zoning? are the units Legal units? If you feel it was converted was it converted properly?

Having 1 furnace, means landlord pays the heat, did you add that in to your rental numbers?

Would you be buying and holding, or buying to flip? This doesn't seem to make sense as a flip but as a hold, to get 1800-1950 a month for about 70-80k investment?

1800/month with an outlay of 80k is a 27% return.

Thanks Ryan,

Not sure if it was converted or not, however it is listed as a 3 family on the public record. The area is zoned res and comm. I'll have to check on the heating cost but the furnace is junk and out of service, 2 units are vacant and 1 is being used by a guy that is not working but takes care of the property owned by the bank, per the tenant living there now. He has electric heat. I would want to have 3 furnaces install if I would make an offer, and dive into it. I would offer 12k building is in very bad condition

This would be a buy and hold.

Thanks again

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I had a 2 family for 15 years, sold it about 7 yrs ago. When I do this again I want to have someone else manage it and I will manage them. So it's been a while and I didn't know many of the things back then that I do now because of BP. I'm not all that excited about the property but I wanted to get some thoughts on it.

Are you a by and hold investor?

Thanks Zechariah