Your numbers looks good, I think you mention that would concern me would be your ability to refinance the property. If it would be hard to refin the property, I would just put up the 20% and have the tenant pay off the property for you in 10-15 years.
One more thing, make sure you do your due diligence on your tenant screening, I have lived in york couple years ago and good tenants are hard to get, if you know what I am saying.
Good luck brother! Hope this helps
I don't know, if York is close to Philadelphia - if so, what's the artist community like?
I've just done this in a D neighborhood in Atlanta and would do it again in a heartbeat, with connected properties: I created a 'creative community'.
Only those that have a dream that they're following can move in. Not those who just like art, but those who are actively involved in some creative endeavour. But they need to have a job to have the income.
So, let's say those houses are all 3/1 or 2. What's the going rate for a bedroom, with furnished living room? What about furnished bedroom as well. Make it an all-in price with utilities and fence all 3 properties in and make outside space all 'common area' with fire pit, barbecue. Put out a load of wood and advertise it as furnished room in creative community.
Do a 1 year lease, but with a 60 day trial period. So, if they don't get along with the others or they're a problem, either one can give 30 days notice.
Creatives loooove to hang out with other creatives. I have so much demand and they're all coming for the community aspect, which is missing so much in today's times. Many of my tenants are doing projects together, because they come from different fields, but all utilize the right side of their brain in some way and thus they 'get' each other.
And then if you get a commercial loan, you might be able to do the appraisal as income approach, instead of comparable sales (I don't know for sure)
@Michaela G. This is a really interesting concept . I’m guessing since it’s a D neighborhood there is nothing else like it around and therefore you have no real competition .
How much was purchase price ? How much did you put into the properties ?
Are the rents much higher than you would get without the creative community concept or is it more that you are getting a lot of demand and better quality tenants ?
I could see this really helping to change the surrounding community as some of them will probably open up businesses or art galleries etc in the area .
Just curious is it a certain age range that live in your properties or is it more a mix ?
@Joseph M. , you're correct. There really isn't anything like this around in Atlanta. There are either large/expensive warehouses, that are live/work or there are just commercial artist studios. Everyone tells me that they haven't come across anything like this at all and that's what intrigues them.
Rent prices were higher than neighborhood, but much lower than rest of Atlanta . We're 2 miles south of Downtown, so very central. Right now the rents may be a little low, but I'm not increasing, because people want to stay. They've made friends and love the compound. I don't want to push it up to the highest of the market, because having steady/longer term tenants is worth more than turn-over. I'm actually planning to make my money in 4-5 years, when developers are wanting the whole assemblage.
Definitely better tenant pool.
Our neighborhood is exploding right now. Investors are buying everything they can. I bought Duplexes for 10-15 and probably put 40K into each duplex. Rents are between 800 and 1000 each unit, depending on size. Had a partner, who owned 2 duplexes and I just bought 1 from him for 140K (rents are total 1650/month), because I'd like to control the whole complex.
Most are in their late 20's or early 30's. A few a little older.
Jimmy, have you looked at subdividing the property to three individual parcels? It may be disadvantageous from a tax standpoint but that depends on the municipality.
I lived in Lancaster and went to school in York and took a bartending course there long long long time ago. Great town lots of history and great food. downtown area is pretty clean and people are for the most part very hospitable. My advice is who you will be renting too. college kids big money from parents. your average Mr and Ms Joe who have a professional job with no kids etc. what amenities will you be putting in washer dryer dish washer etc. It used to be the slumlords were the landlords. Now Landlords are care givers...
but Im sure you ran your comps. Good luck i miss York and PA in general o and the amish
@Michaela G. Interesting. Those are great purchase prices considering the rents. I don't know much about the Atlanta market, I know that things had gone down a lot during the housing crash, but it seems like things have gone back up a lot. Maybe similar too Vegas and Phoenix , things were so low and now 3x or more especially the lower end homes.
That sounds smart to wait 4-5 years and cash out for a big profit, while getting good cash flow in the meantime.
Would like to do something like this in L.A , but now even duplexes are priced at like $500,000 maybe on the low end with rent control tenants, it's kind of funny to see these being marketed as 'great investment property' when one would be losing a bunch of money by buying it.
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