Buy rental property or wholesale it ?

Question

Hi BP, I was wondering if I should buy this rental property or wholesale it ? Its in Jacksonville, Florida in a low income area but a renters area, they are asking $60,000 and it needs about $ 30,000 in repairs, a multi-family property quadplex (four-plex) it will cash flow around $1,650 monthly.They have property management in place for their other properties, I can use the same management if I desire. I'm leaning more towards wholesaling it, what do BP WORLD think?

Breon Smith · Answer

Ok thanks

Sunny D. · Answer

if someone is telling you property is cash flowing for $1,650 when rent roll is $2,000, its just not possible. Assume 50% of rent roll goes to operating expenses (deferred and ongoing) and you then have to take care of the mortgage. 2000$ rent on say a 100K property would max cash flow $500PM

Breon Smith · Answer

Well I think I'll wholesale it in a package, they want to get rid of 3 of them 2 vacant and 1 occupied and a friend of theirs also wants to sell , its fully occupied. I'll see if I can get all 4 in a nice package to wholesale. Thanks

Breon Smith · Answer

Its in NEW TOWN 32209 zip, property management in place for one of their quadplexes that property is cash flowing for $1,650 rent roll is $2,000 same type of apartment on the same street and this is what management is telling me.

Scott Malatesta · Answer

I agree Pratik. The numbers seem off. Can you elaborate a little Breon?

Joel F. · Answer

@Breon Smith before you buy verify zoning if the property is zoned rld-60 the city will not give you occupancy, the property must be zoned rmd-a,b, or c, in order to get occupancy.

Joel F. · Answer

@Breon Smith I know that area pretty well 60k for a fourplex is too much money especially if you have to put 30k in repairs. Your projected rent role a month is very low. My tenants are paying me $550 a month in the same area. If you feel it is worth it buy it and hold it until the area appreciate because as of now that fourplex will not resell for more than what they asking for it as is. I have a duplex not on the market and will sell it to you for 75k turn key management in place, producing $1200 a month, $600 year taxes, $900 year insurance, no lawn care needed, fridge 2 year waranty with lowes stove 2 year warranty with lowes for both units less headaches plumbing and electrical is upgraded.

Scott Malatesta · Answer

What area in Jacksonville is it in?

Pratik P. · Answer

Wait, is the cash flow $1650 or gross income $1650? If that's the actual cash flow, I'd say you're sitting on a golden opportunity!

Buy rental property or wholesale it ?

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