Buy..Rehab..Rent .. Need advice
Posted this in another forum but maybe this is the right forum? If not apologies!
All,
with a quick background, I am new to REI. I promised myself that I would purchase my first investment property in 2017, and have really started to sharpen the axe if you will. With that being said, I really wanted an affordable entry real estate, and was looking at possible rentals in the areas near me that offered a decent price, with a keen eye towards a multi family unit.
With that being said, a foreclosure popped up (multi family) and is set to go to auction in a few days. I went yesterday to see the property, and brought my uncle who was very handy to see if he noticed things I did not. Essentially I believe this property could be had for cheap, and I firmly believe there is usually more value in something ugly, as most are turned off to the opportunity bc it could be too much work. I have looked at comps in the area.. and rents as well in the likely event I want to rent this out. The rents seem attractive but I can't get a firm handle on the value - #1 it needs work, and #2 the comps are other multi families that have different qualities.
Does anyone have any recommendations on how to proceed? Work needs to be done, for example the kitchens are small, but I am not sure how to gauge the cost in replacement. Realtor informed me we can make an offer to the bank prior to auction, which if bank accepts can remove from the auction and secure you the property. But I am not sure how to affirm I am valuing the property correctly, and the replacement cost of some things that need to be fixed, repaired, or just spruced up. I want to learn, and going right into it is the best way. I feel overwhelmed, but also excited at this opportunity. Maybe overwhelmed is a bad thing, but I don't want to pass up an opportunity that could make a heck of a lot of financial success. Any thoughts or insights would be greatly appreciated.. also to add, I have the access to liquidity for the purchase and repairs.
Happy to post #s of the potential property, but again just not quite sure where to start !
Thanks in advance,
Jason