Investor · Orlando, FL · Member since 2017 · 51 posts · 11 votes
I found a property that was purchased back in 2015 for around $13,000 a unit. It has been sitting ever since, has material sitting outside and I looked up the current owner who closed his LLC and the tax bill still is unpaid for 2016.
Every unit is a 2 bed 1 bath - Pretty much the entire property needs rehab. As it stands has a tax assessed value for $245k.
Now this is the kicker. What would you guys look for when looking at this property? This would be my FIRST deal. Median rent around the area for a 2 bed is roughly $900 a month. Probably lower income area, class C property. It just never was finished.
Real Estate Agent · Fort Collins, CO · Member since 2016 · 246 posts · 142 votes
9y
Hi @Garison Clemens, I think you have a really good question, what I would look for depends on a couple things---
Where is it located?
Have you run an analysis on the property? Knowing how many units/location will get you more accurate numbers when you're running an analysis, especially when it comes to rehab costs, taxes, insurance, property management, etc.
So, to answer your question, the biggest thing I would look for after having all of the figures for the property would be if it meets my criteria for CoC/ROI OR if there is enough of a spread to flip it.
Real Estate Agent · Fort Collins, CO · Member since 2016 · 246 posts · 142 votes
9y
Hi @Garison Clemens, I think you have a really good question, what I would look for depends on a couple things---
Where is it located?
Have you run an analysis on the property? Knowing how many units/location will get you more accurate numbers when you're running an analysis, especially when it comes to rehab costs, taxes, insurance, property management, etc.
So, to answer your question, the biggest thing I would look for after having all of the figures for the property would be if it meets my criteria for CoC/ROI OR if there is enough of a spread to flip it.
Rental Property Investor · Cape Coral, FL · Member since 2012 · 427 posts · 186 votes
9y
I don't have any great input, but Im considering a C-Class property as my first "apartment" deal as well. Good luck with it and I will be watching to see what good contributions you get
Tampa, FL · Member since 2017 · 240 posts · 153 votes
9y
Here's what I would first look for:
How is the condition of the roof? I'm gonna say a new roof is gonna run you $20,000-$25,000 but I am being very roughly approximate here. You're not going to get it done for $5,000, and you're not going to have to pay $50,000.
How are the air conditioning systems? Is it just a window unit for each unit, or is there central air conditioning?
How much do you HONESTLY and REALISTICALLY think it will rent for? I can tell you right off the bat that I'd be dumbfounded if all 9 units rent out for $900, or even 850 quickly, and speed is the key for the first year of cash flow properties imo. Without even looking at it, I'm gonna say its going to be more like $600 or $650 a month to make it in SERIOUS demand, and $700 a month might be doable as well. $700 and $750 a month would be even more doable if it is in a PRIME location in Daytona Beach, but I doubt its in a prime location (Im a Floridian too).
How much is it going to cost to repair? Your ability to rent out this property actually isn't going to even be that hard. I can already tell that this place is not bad...you just got to get it running off the ground. The big question is, how much are the renovations going to cost? 2/1 bedrooms will rent easily in places like Daytona Beach all day long, provided you undercut the competition by $50-100 (just for the first year as you fill it up with the first 3 or 4 families for this 9 unit).
If I were in Daytona Beach, this seems like something I would be willing to pay $270,000-$280,000 max for this (including repair costs). Or $30,000 a unit. I'm guessing there's a second floor to this property as well which is kind of good news imo (less square footage for new roof which I'm sure it probably needs). There's a good chance that the current owner just does not have enough money himself to rehab and rent out the place and is somewhat desperate to sell.
Assuming the electrical wiring and the plumbing is still intact, why not offer something like $140,000, and be willing to go up to $180,000? That would be about $20,000 a unit, and if you rent them out at $675 a month, you're in the money.
Contractor · Maitland, FL · Member since 2015 · 24 posts · 20 votes
9y
I know the area well. (especially if you're on the island) Please make sure you check with the City also. They are really pushing to clean up the area and have been changing some of the zoning. If this is a legit (9) unit, you're probably ok, but I've seen a ton of homes converted and added on to, to make them multis. When the new buyer goes to do a bunch of work, (pulls permit) it's denied based on use. Good luck and if I can do anything to help, lmk. (I'm going to be building 15 homes over there this and next year) Best, David