Deal Analysis Fitchburg Massachusetts

Multi-Family and Apartment Investing
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Deal Analysis Fitchburg Massachusetts

Justin J.
Rental Property Investor · Durham NC · Member since 2014 · 29 posts · 9 votes

Two Family up/down Multi located two blocks from Fitchburg State University, Fitchburg MA.

Top floor: 4 bedrooms/2 bath.

Bottom Floor: 3 bedrooms/2 bath.

Cannot finance it without owner occupancy, so the plan is to inhabit the bottom unit and rent out the top unit. This property was rented out the past 5 years with one year leases by the room. 2012 and 2013 rents were $500 per room, 0% vacancy. Total rent $3500/month.

165,000 purchase price, 5% down with a 30yr MassHousing conventional mortgage.

Taxes: $3850

PMI: $828/yr

Insurance: $2400

Electric: ~$1,560

Heat (oil): $6,600 (by far the biggest expense, the utilities aren't separate, there's only one thermostat/heating system for the whole house).

Vacancy: $2000/$2500

Rent is $2000 for the top unit, and an additional $500 if we rented a bedroom out in our unit.

$8,250 down

$4500 closing costs

(~$7,800 for 6 months reserves required by MassHousing)

Is this property worth it? The numbers are very close when factoring in owner occupancy, but would work out much better with renting out two units. 

I appreciate any comments/questions/statements!

-Justin

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  • Eric Dubrule
    Investor · Leominster, MA · Member since 2013 · 54 posts · 5 votes
    12y

    Hi @Justin J. , my thought is there is going to be a lot of work each summer to find and release those 7 rooms (once you move out). Looks like you might have the flexibility and know how since you are a real estate agent, but  I just want to be sure you are up for the challenge. You might also consider factoring in for repair and capital expenses. Not knowing what condition the property is in, I'd at least budget 10-15% of income. Also, i dont see water and sewer expense. Fitchburg has an outrageous sewer and water rates. You might need to add an additional 2-3k for water & sewer for the year.

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  • Justin J.
    OP
    Rental Property Investor · Durham NC · Member since 2014 · 29 posts · 9 votes
    12y

    @Eric Dubrule Thank you for your response and suggestions. I wasn't aware of the outrageous sewer and water rates in Fitchburg. You're also spot on for placing tenants into each of these rooms, its definitely a challenge. Where are you properties located in Fitchburg, north or south of the Nashua river? What was your first property Eric and how did you get into a commercial property deal?

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  • Eric Dubrule
    Investor · Leominster, MA · Member since 2013 · 54 posts · 5 votes
    12y

    @Justin J.  Sorry of the delayed response. I have 2 south and 1 north of the Nashua. It's a bit outdated but has very large 3 bed units and in a safe neighborhood for Fitchburg. The commercial deal was from a relative that was looking to get out of the property. I lined up a tenant and worked out a deal to take over the property for a large discount. I can guarantee this will be the first and only commercial deal in Fitchburg I do. As I'm sure you are aware, there's plenty of vacant commercial space in Fitcburg, this just happened to be a niche use (dental office) and had been fortunate to have a tenant looking for a space to rent.Any luck int he past weeks on a property?

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