hello future friends,
Me and my partner have started our journey in real estate investing and we have come across what looks like a great potential cash flowing property. Its listed as a SFH and is considered one by the county but has a 2 story duplex in the back that needs some extensive repairs from water damage but the actual house is in decent shape. PP of $110k with an estimated ARV of $300k due to the duplex out back. My question is that we are really looking for flips at this point but due to potential cash flow of this property, which i have yet to analyze, do yall think this could be a good candidate for the BRRR method or are there things i need to consider first that i may not have thought of yet? Thank you in advance.
If it is zoned for single family and you use it as a multi you could run into problem in the future. Go to town hall see what it will take to convert to multi zoning.
@Brandon Yusko Welcome to BP and congrats on getting into REI I'm happy to hear that! It sounds like you may have a diamond in the rough there. I don't know the neighborhood or area but why not keep this property like you were thinking? Fix it up and force appreciation and then refinance to buy a possible flip! This honestly seems like it could be a cash cow if the numbers work out and you do it right. Let's just say the house and each duplex rents for 1k each. Maybe you have to put in 100k in repairs and holding costs. That's still a good deal in my opinion because it is more than a 1% rule. I know that is a lot of assuming but I would suggest check with the city on the zoning and what they will allow you to do. If that ends up working out I would suggest holding onto it. It seems like you see that same golden opportunity that I see which is great! Just run the numbers and make sure it makes sense financially! Good luck!
Make sure you pull the permits to see if the duplex has been permitted. It could be a big problem if it has not
Thank you all for the advice. I will look into the zoning issue. I feel like i might have a diamond in the rough here, i just gotta run the numbers correctly.
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