Hey all PB members! I have been listening to the BP Podcast weekly now for about the last 2-3 months. I have also listened to numerous webinars in the last year or so. To start things off, my brother and I have been looking to get into real estate for at least 3 years now, but never knew where to start. Since I started listening to the podcasts, however, I have picked up so much motivation and knowledge that we set a goal to purchase our first property by the end of 2017! As we have been preparing, we've been looking in both areas where I just bought a house in western PA and where he lives back home in central PA with our parents. That purchase is a home which I am currently househacking and was a first-time experience in real estate for both of us. Because it was the area where we grew up, we were looking in the central PA area because we knew the market and the people there best. Also, through word of mouth, we have only been able to find 2 private lenders in our area who are looking for quick returns and most likely only financing single family flips. Now, to throw a curveball in, I just came across a property today that is literally a 1 minute walk and 2 properties down the road from my new house - an 11-unit rental property. The real estate agent advertises a nearly $5000 gross profit monthly and has a strong tenant base. Now, I have only lived in my house and this area for about 3 months, and in those 3 months I have witnessed the state police being there an average of probably at least 1 time a week. Knowing what you all know, and doing what you all do...what would you suggest I do on this property? I think it would be an awesome opportunity, but I'm just unsure if I could get the funding needed and the uncertainty if we end up being burnt in the end with the type of tenants there and if they even pay rent on time. Any assistance would be greatly appreciated, and I hope to hear some feedback!Thanks!
Ooops...I mean "BP members", by the way!
Hi Ray. Welcome to BP.
Contact a local realtor and request the income, expenses and rent roll for the property. Do the numbers work? $5,000 gross profit per month seems like a stretch, but you won't know without looking at the numbers. Are current rents high or low? What are vacancy rates? Is the building well managed or is there deferred maintenance? Are utilities sub-metered, etc.? Gather info and make an informed decision...don't speculate.
Let us know how it goes.