Hi, i am in a mid-sized town in Arkansas. I currently own a duplex and 5 rental homes around town. We bought our first rent house almost 2 years ago now. It was a bank foreclosure. Appraised at 60, paid 30. We used equity in it to buy number 2 and cashed out the rest of the equity.we have done this with each consecutive deal and reinvested the cash.
I recently came across a foreclosure I'm looking at. It is 10 unit apartment complex. It has a 15 washer/15 dryer laundromat on site, as well as a 3 bay coin op car wash with 6 vacuums. The place was built in 07. It has been empty since it sold 5 years for $560,000 fully operational. It appraised 2 years ago (closed up) for $280. The bank has been asking $199. I put in an offer of $170 and they accepted.
9 apartments rented at $350 one is tiny and rented at $200. Insurance/ liability is quoted at $5000. Taxes are $3200. Mortgage will be $823 monthly.
What are your thoughts on this deal? I have no clue what income to expect from carwash or laundry.
@Dustin Lavender 15 w/d units in a 10 units building + car washing sound more like a business than a RE investment.
If you are interested in being a business owner then build a business plan, check the laundry/car washing competition and evaluate the income/expenses accordingly.
If you're not planning on making it a business, then don't count on that income, just evaluate the property on its own and consider the extra income as a cherry on top.
@Dustin Lavender Hi Dustin, this seem to be a good deal. I ran some quick numbers and the property alone seem to be providing a minimum of 16% cash on cash ROI for any investor putting a 20% down payment. Assuming the washer and dryers are coin operated, both the laundry and car wash/cleaner are extra income that would increase your ROI. Do not forget to factor in a percentage for machine repairs. The laundry business can be costly if you do not become handy for repairs. The best advice I can provide you is to learn about the parts that need to be replaced. Youtube is a great place to learn. For any electrical stuff, always call a professional.
Overall, this seem to be a great deal. I wish we had deals like this in my city!
I'm not actually putting any money down. I did a package deal a few months ago on a couple of SFH and an empty lot. It has about 45k usable equity and that is what I plan to leverage against the property and cash out to use for repairs also. I think I may try leasing the laundry equipment through a company here that does all repair and machine maintenance as well as collection. They typically give owners 40% take.
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