Lakefront property with upside potential, would you invest?
Hi all,
My realtor has this property for sale and I was thinking about purchasing but as it sits has no COC return. They wanted 500k and have come down to 475 and I was looking to offer the 425K and at this price is not profitable. Total of 7 units, a duplex, mobile home, and 4 other individual cottages. A 3 car garage which is just storage for owner. All are on one meters (water, sewer, gas, and electric) and owner pays all utilities. Now, here is the upside potential....
First, we can put double pane windows in all the units.We are east of Cleveland Ohio and living on the lake is quite cold and all the units are single paned windows. This would decrease gas bill.
We could also add more insulation and possibly put in Honeywell app. controlled thermostats.
Next, the lakefront unit will now be unoccupied d/t the owner is living here. This is only a 2 bed 2 bath cottage but could be Airbnb'd. Would advertise year round but would only expect it to be occupied April through November.
There is also an RV pad with 50 amp hook up that can also be advertised for rent. And room to add 2 more spots.
We could rent out 2 of the garages to tenets for a little more income.
Lastly, would have to look into getting the water metered for all the units as well as the sewer costs.
The tenets are month to month and all utilities are paid by owner and as one moves out we could get that unit ready to Airbnb. Having half of the units to be rented out with full time tenets will help in winter months when other units are waiting to be Airbnb'd.
Thank you all,
Jennifer
PS. In Brandon's book The Multifamily Millionaire, he stated, "but offering $400,000 on a $500,000 fourplex that's been on the market for sixty days is completely reasonable." on page 164.
PSS. Could I go as low as $375,000 in this market?
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