Need help analyzing my first deal - 1.4 million I would take 11% interest
Hello,
I am looking to be partial owner of a property that is 2 blocks from the beach in Southern California. I would be sinking most of my earnings of $150,000 into this property to own 11%. The property would be purchased for 1.4 million. It is a large lot of 15,000 sq ft. Right now it has 4 units on it. Its possible to convert the front home which is on a popular street for commercial space into retail and get more rent. But as it stands now it may just be a rental.
Purchase Price - $1.4 million All case ($150,000 my share for 11% interest)
Costs to rehab $100,000
Total of 4 stand alone homes
Unit #1 - 2 bed 1 bath 780 sq ft - Estimated $1800 a month - $2000
Unit #2 - 1 bed 1 bath 500 sq ft - Estimated $1450 a month - $1500
Unit #3 - 1 bed 1 bath 500 sq ft - Estimated $1450 a month - $1500
Unit #4 - 1 bed 1 bath 540 sq ft - Estimate $1500 a month
Projected Rent - $6200 a month
Property Tax Rate - 1.0612% or $14,840 yr - $1,236.67 per month
Estimated Insurace & Flood - $2000.00 a year - $167.00 per month
Property Management @ 8% - $496.00 per month
Electricity (Tenants pay???)
Water (Tenants pay???)
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There is the possibility of putting non-permitted rentable trailers in the back that will rent for $1500 - $1900 for a potential additional rents of $3000. The other potential is to convert from house and rent as restaurant for $3.00 a sq ft.
Looking at this property that has a large lot and being close to the beach as a possibility. Please let me know what you think and what I am missing.