Closing in 10 days! Excited and Hesitant! Let's Analyze It!
Hello All,
I am a new out of state investor and have a grand total of 1 property currently in my real estate portfolio. LOL. It is cash flowing nicely with a good tenant who currently does not have fear of losing their job. I am under contract on number 2 and want to know your opinions.
Location: S. Arlington Ave in Irvington
Purchase Price $74977
4 Bed 2 Bath 2370sq feet SFH
Has New HVAC, New Water Heater, Updated Electrical Panel (150A), roof is 4-5 years old with no leaks. Water was off at inspection so there might be a need to allocate some money in the rehab budget for any discovered issues. House was a foreclosure and looks like it was possibly in the middle of a rehab by an investor. Might have run out of money after installing new HVAC, Updating Electrical, New water heater, Paint, 1 side of vinyl, etc.
Rehab Needed: $25k (I am figuring $35k to have a cushion)
Scope of Work: Update Flooring with LVP, Update Kitchen with new cabinets, countertops, appliances, paint inside and out (interior does not need paint but has outdated color), update baths, install vinyl siding on 2 sides (2 sides already have vinyl), Replace Windows, Install new entry doors, freshen up the landscape.
I have been told by a few people that due to the uncertainty that I should forfeit my EM and costs already put towards the process and walk away. I think that this is panic and fear. I feel that this property is positioned to become stable sooner than later.
My strategy is to Fix to Rent using BRRRR strategy. Purchase cost per sq ft is $32 Cost per sq ft after rehab (using $35k) $47. Median Sale Price per Sq Ft = $83. Targeted ARV Per Sq Ft. $68
Funding - HML with really good rates, low upfronts, no prepayment, can convert to 30 yr perm as soon as I have a lease signed. Expected rents $1100-1200.
I feel that we will have a tough next few months but also believe we will bounce back. I feel that it is in a good enough neighborhood that worst case scenario I could still rent it for my anticipated mortgage pmt and take a small hit each month until the recovery happens. I truly believe it will not come to that.
What are you thoughts based on my scenario?
Thank you in advance.
James