[Calc Review] Help me analyze this deal
Hey BP community,
So I'm underwriting a SF home in Greenville, NC as a buy & hold rental house hack. I want to rent out all 5 bedrooms by the room double occupancy as a male-only sober living house that I will not be operating. I will live in the separate mother in law suite with separate entrance/kitchen etc all self contained and not accessible to the main house. The 10 renters will be part of a sober living organization called oxford house. My lease will be with the "oxford house" and not with the individual tenants and oxford house has a list of strict rules including weekly drug testing, mandatory meeting attendance, mandatory job/school attendance, curfew, required house chores, visitor policies, etc. If any tenant fails a weekly drug test they are immediately expelled until they complete a 28 day drug rehab and show sometime of sobriety. The house is self managed with oxford house oversight and the house interviews and votes on all incoming tenant applicants. As the landlord, the rent is consistent and predictable meaning the rent is set by me and doesn't change even if all beds are not filled. The tenants are incentivized to keep all beds filled in order to keep their individual rent amount as low as possible. If a tenant gets expelled than that means everyone remaining gets an increase in their rent/utilities. All utilities are paid equally by the tenants and they have 4 house officers that manage the house budget and collect monies and pay rent and utilities themselves in an effort to teach personal responsibility. Oxford house organization offers help, infrastructure and guidance to these tenants.
So the deal is a SF buy & hold house hack. I have linked the underwriting report and would love for ya'll to give any feedback about my underwriting and additionally if you have experience in this niche rental market.
thank you!!
*This link comes directly from our calculators, based on information input by the member who posted.
Most Popular Reply
It's great that you have found a niche rental market with consistent and predictable rent. The fact that you will not be operating the sober living house is a good idea since it is managed by Oxford House. This can help to reduce your potential liability and make the management of the property easier for you.
Since you will be renting out the property by the room, you will need to make sure that the property is in good condition and can accommodate multiple tenants. You may need to make some modifications to the property to ensure that it meets the requirements of the sober living house and is comfortable for the tenants.
It's also important to make sure that you are in compliance with all local laws and regulations regarding renting out a property to multiple tenants. You should check with your local government and obtain any necessary permits or licenses.
Overall, it seems like you have done your research and have a solid plan in place. Good luck with your investment!