Hello everyone, I am both excited and sort of terrified! So I have been looking at properties and analyzing them and I came across 1 property. It is not in the best (Or Worst) neighborhood so I know it wouldn't attract the best tenants but if I screen properly I think I would find good enough tenants to take care of the property and pay rent on time.
Without further adieu, This property is a 4plex In Lethbridge Alberta, it's current rents from the landlord are all $700 and tenants pay utilities. He was asking $320,000 (Which is already well below market value for a 4plex in my area) but with some negotiating he is willing to get rid of it for $281,900. The property needs a lot of work though, I have budgeted for $25,000 per unit. After rehab is complete my plan is to raise rents to $850 and tenants pay utilities.
So the basic financials are $281,900 purchase price, $100,000 rehab cost, then when this is complete the income of the property would be $850 and no utility expenses.
I am planning on using the BRRR strategy for this property.
My wife and my personal finances is I have $14000 in savings, $600 in another account and I have a line of credit of $40,000 with and interest rate of 7.8%.
I have not exactly officially offered this $281,900 but I want to but before that I want to hear any opinions and things I may not have thought of. It looks like a great deal for my area but I am worried I am overlooking something.
What would you do in our shoes?
Hey I am in a Lethbridge as well. What area of town? Howbmuch work does it need? $700 rents seem pretty cheap.
Yes $700 is cheap, it's because the property is not in great condition.
It's on the north side.
Hello guys....Name is Jaarno.
I also invest in lethbridge and area
This sounds like a good potential deal!! Why is the owner selling, where on the north side... what are the market rents in that area...what are comparables worth??
Location and age of property are big factors In this one.
Agreed there are some good areas of the north side and some really bad areas.
Good question from @Sean Kollee Using a HELOC would be cheaper than a LOC.