Ok BPers, I am in Norfolk, Virginia on a work trip and I'm taking advantage of my time here to check out the local real estate for future out of state purchases. I live in California and my income will go a very long way in a low priced market like Virginia. I also come here a lot because I work for the Department of Defense and Navy. I was eating dinner today and browsing listings on Redfin and I came across this quadplex in the Ghent/Park Place neighborhood of Norfolk (don't quite know the neighborhoods yet).
This listing looks too good to be true. What am I not seeing???
227 W 27th St, Norfolk, VA 23517
6 days on Redfin
List Price: 119,900
6 bedrooms/4 bathrooms
2,734 sqft living space
Total Current Rental Income: $2300 ($625x2 and $525x2)
Calculating with 20% down, 10% vacancy, 10% maintenance, 10% capex, and 10% PM
Monthly PITI=$638 and it comes out to $740 cash flow per month.
For Virginia investors, are these normal numbers????
@Kevin Phu Welcome to the cash flow outside of California! Its amazing huh? Crazy when you see it in person and its actually real. Hope someone chimes in about the neighborhood etc. Good luck and keep us posted.
@Dylan Vargas blows my mind! I'm excited to start learning more about the local market here and honing in on a criteria.
@Account Closed from the local investors on BP, Norfolk and Portsmouth are strong rental markets with good cash flow. Lots of gentrification going on and incoming businesses like IKEA in 2018.
Howdy @Kevin Phu
It currently is a High Crime area compared to the rest of Norfolk. Do some more research to verify before investing.
@John Leavelle That's what I'm doing...
Thanks for the info
Norfolk/Hampton Roads area has a TON of multi-family homes, and definitely worth looking at! I personally don't know the area, but it looks like a rougher area, but for the right price people will live there! If you're in CA, you'll definitely be hiring a PM so you rarely will touch foot there, so why not go for it?
@Linda D. I've noticed there are a lot of MFRs here! Definitely not the same where I'm currently living. I actually come to Norfolk somewhat often because of work so I definitely want to take advantage of that and personally check out the neighborhoods and property. Main reason for that is so when I do have a PM, I can understand what they're telling me because I've seen it for myself.
@Kevin Phu it's not just location - you have to see the house inside.
It's built 111 years ago, still original windows, no central A/C, even exterior is shubby - you can only guess how much deferred maintenance you'll see.
After you replace 4 kitchens, 4 bathrooms, all windows, paint all that monster - your numbers won't make sense at all.
BTW, it's already not that attractive - it's Midwest, not Cali - you get much better ROI here, but not so much appreciation.
This house is not a good buy - it's losing value every day and needs tons of money to become cash producing asset. Now it looks like run down slam ........priced too much.
I would also add that since it's a 6 unit you'll have to be getting a commercial loan with different terms than what you're assuming which will make a big hit into your cashflow.
@Irina Belkofer @Doug Woodville That makes a lot more sense now. I also spent the afternoon driving around the Park Place neighborhood and yeah...no thank you. Lots of rough looking homes and lots of people hanging out on the stoops. If I were to grade it on my A to D scale, it would be a solid D.
The listing says its 4 units and so does the tax roll. Where did you see 6 units? Did I overlook something?
Thanks for all the input! I don't intend on buying soon. Just researching the local market.
How did you come across this property, certain queries set through Redfin? @kevinphu
@Kevin Phu My apologies, I saw the "6 bedrooms" and for some reason thought 6 units.
I researched both Ghent and Park Place in Norfolk for many months before deciding not to invest due to crime, flooding, etc. Most people consider Park Place to be in the midst of gentrification and Ghent to be more upscale. I would watch out for slow turnover. There's also a lot of Section 8. That said, I do know two folks with experience in Norfolk I can connect you with if you are still interested.
@Jason K. redfin lets you filter multifamily when you search, same way they let you filter detached homes, condos, townhouses, etc.
Will set new queries now @Marshall M.