$6K Syracuse Home ?

Question

Some houses in Syracuse NY are going for $6K. Some are total demos and some look decent. They are usually bank owned.

Are these houses good investments?

My goal would be to buy, rehab and rent?

Frank Procopio · Answer

I am an investor as well as a broker who specializes in selling investment property. So the landbank or auction is usually how I pick up personal inventory so I am not competing against my clients for houses

Frank Procopio · Answer

And Ivan you are correct about the numbers the renovation plans they have posted over the last year have made no sense. The majority of them require you to invest more than the home is worth. It has been extremely hard to get a deal from them. Unless you are doing sweat equity it doesn't make alot of sense

Nicole Cutlip · Answer

@Ivan Mendoza

The Landbank will most likely require you to submit an application which includes a detailed cost estimate, detailed rehab schedule, and proof of funds with 50% down. The application process may sound "lengthy" but I found that its actually a really useful tool when starting out!

Frank Procopio · Answer

Yes I have. I don't compete against my clients being a broker and an investor. The landbank is typically how I buy. I have purchased over a dozen over the years personally and helped clients with others. The process is lengthy.

Ivan Mendoza · Answer

@Andrew Postell

Hello Andrew,

Thank you for taking the time to write all these instructions and steps out. They are very much appreciated.

Now that I analyze these inexpensive houses it’s getting clearer that the numbers are a little too tight.

The house I’m looking at is going for about $6k and it needs major renovation which I believe would be over $30k-$40k . Comps are around $35-$42k which I believe is a little to tight.  Holding cost wouldn’t be to bad since the house would be bought cash: utilities and Insurance would be it on holding.

My idea was to buy, hold to rent but doesn’t seem to be a renters location.

Thankful I’ve been getting replies back from locals and I also look for more info on the State Forum.

Thanks again

Ivan Mendoza · Answer

@Nicole Cutlip

Thanks for those detail Nicole.

I’m glad these deals are working out for you.

You did your own rehab?  That must have save you tons!

Nicole Cutlip · Answer

@Ivan Mendoza

Investment Property #1 - 3 bedroom 1 bathroom, Single-Family home. Built in 1908 in suburban neighborhood.

- Purchased through my county Landbank for $20k. Self-rehab costs $7k.

- Financed 50% through private lender ($10k) and paid out of pocket for remaining 50%, plus rehab costs ($17.5k)

- Appraised at 5.5x more than the purchase price.

- Used this "primary residence" to take out a hefty HELOC to finance the purchase and renovation of Investment Property #2 and purchase of #3.

- Note: Due to Landbank stipulations, I must use this as my primary residence for a total of 3 years.

- Potential rental charge $1,000/mo in November 2021

Investment Property #2 - 2 bedroom , 1 bathroom. Cape Cod Single-Family house.

- Purchased from county Landbank (no stipulations!) for $10,000.

- Financed through HELOC from Investment Property #1 (Purchase price & Renovation costs)

- Renovation is on-going (December 2019 Completion) About $17,000 in renovation costs.

- Charge $700/mo rental fee

Ivan Mendoza · Answer

@Nicole Cutlip

When you say no restrictions do you mean investor can rehab without Land Bank involvement after purchase?

Ivan Mendoza · Answer

@Nicole Cutlip

Thanks Nicole.  This was exactly my plan for these $6k houses but there’s not enough meat on these deals.

Could you give me a little more info on the property you purchased and rehabbed?  Purchased Price, rehab cost, rehab duration?

Nicole Cutlip · Answer

Hello Ivan - Totally worth it when starting out! I purchased 2/3 of my investment properties from my county Landbank.

After rehab and closing, I had the first property reappraised. Its value increased by 5.5x more than what I paid for it. I was then able to take out HELOC on this property and use it to finance investment properties #2, and #3.

In my county some properties do have restrictions, as in it must be your "primary residence" for 3 years... but other properties have "no restrictions".

$6K Syracuse Home ?

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