Banked Owned Multifamily Unit in Daytona

9 Replies

I got this alert today. Please feel free to say your ideas. It looks like a nice project. I sold very close last year an 8 unit for 350K, which had been completely gutted about 12 years ago. This looks like a similar project but it will need a good rehab.

http://www.flexmls.com/share/Jufl/149-S-HOLLYWOOD-...

Hummm ...   What's this?

It doesnt say details, from the tax roll I think it has 4×one bd and 4×2bd.

Hey Pavlos,

I'm in Orlando. Had a few questions for you:

How's the neighborhood around this property?

What the per unit rehab estimate? (looks pretty rough in the photos)

Do you have an estimated rent for the 1 bd & 2 bd units?

Thanks,

Sean

Here's the main point. Is it in a desirable area? What's the population draw around the building and what are the employment opportunities? Obviously you can get away with having a desirable cultural draw, or a great employment draw, but both is better. The address is in Daytona Beach, but that doesn't mean it's in a desirable area. 

If it's in a great area, there are no major, deal breaking issues around the property (soil/foundation issues etc.), and you can rehab it without breaking the bank, i would say it warrants a more detailed investigation. Like everything else, make sure you do all your due diligence and get all the proper inspections done, and build contingency plans into your offer because you never know what can be uncovered when buying a building like this...

Hope that helps and best of luck! Let us know what you end up doing.

From the link it says 10 bedrooms. So it's probably 6 x 1/1 and 2 2/1.
The area isn't bad. It is beachside and there are a lot of hotels nearby.Tourism is a major industry. Mostly rented to service industry employees. Rentometer.com has average rents in the area for a 1br at $595 (which would include water and probably heat).

The issue might be the zoning change in Daytona Beach. The city is trying to clamp down on all the illegal apartments and clean up. Not necessarily a bad thing, but if you are counting on x number of units and all of a sudden, you can't have that many, not good. This one looks OK for number of units, but please check out the specific zoning requirements. Might have issues with the parking. They want spaces for 2 cars per unit, as far as I understand.

Good luck, inspect thoroughly, and let us know what you end up doing.

The unit that i had sold had a certificate of occupancy from the city. The one bedroom go for 650, two bedrooms go for 800 if we assume that you will have to do basic renovation. I havent done research on the property as for all the details. Heat is part of the Ac here in florida. I didnt see if it has central ac or window units. So the tenant pays electric. Water owner will have to pay. You should put coin laundry for sure. 

Originally posted by @Sean Myers :

Hey Pavlos,

I'm in Orlando. Had a few questions for you:

How's the neighborhood around this property?

What the per unit rehab estimate? (looks pretty rough in the photos)

Do you have an estimated rent for the 1 bd & 2 bd units?

Thanks,

Sean

 Sean estimate for the rehab if i dont walk it i cant say for sure.

just messing around trying to work this out, how were you thinking of financing it? What would you guess to be the renovation cost? 

Originally posted by @Ceasar Blackman :

just messing around trying to work this out, how were you thinking of financing it? What would you guess to be the renovation cost? 

 I would estimate 5-7k per unit just to come to a starting negotiation price plus some overall needed projects (replumbing, upgrading electrical, Central HVACetc) , but a big factor would be the fact that it will be vacant for at least 2 months before the first tenant would move in. Not many people would pay to be in a under reno building. During my due diligence I would get more accurate estimates and renegotiate price.

If the preliminary analisys went well I would put a plan for financing which would include  a good chunk in from me and possibly partnering. Then after few month refinance it. Or if we could get a good commercial loan would be good plan as well. 

Cant say a lot until i visit the property.

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