Updated over 8 years ago on . Most recent reply
Possible rental purchase
Wondering what people think about this buy/hold deal in Southern California
Purchase price: 230K
Rehab estimate: 70K - rough estimate
Rent: 2055/month. 3 years left on lease (long term tenants, likely will not move after lease is up)
Comp sold in area: 340K-350K for similar house.
Even though the house needs tons of work, nothing will likely be done until current renters move out. Their lease is up in 3 years, but they may not even actually leave. The rehab will likely be extensive if done as everything needs to be fixed.
Pros:
long term renter with good history.
long lease - hopefully no vacancies for a long time
may not need to rehab for years if tenants stay
buying at about 50K below sold comps in area
Cons:
rehab will be costly when it needs to be done
low cash flow based on cost of house/rehab
Would appreciate your opinions...