3 House Bundle in a C class neighborhood
Hello BP family, I hope you can help me analyze this deal. I have come across this deal in York, PA, involving 3 side by side single family homes. Two of the units are currently rented for $750 each, while the third unit is vacant and currently undergoing repairs. All three homes are in less than average shape. The two rented units need some cosmetic updates including replacing windows. I would budget $10k each for the updates. The third unit is gutted and needs kitchen, bath, flooring, hwh, furnace. I estimate $30k for repairs. Rent will also be $750 when its done. All three will need new shingles.
The asking price is $80k, in a C neighborhood, the market value of a similar sfr is $35k-40k. Taxes around $1600 each. Im not looking for a quick flip, I want to hold it long term.
I believe if I can buy the properties for $60k, with remodeling I will estimate $110k. Idealy, I want to settle with cash and do a cash out refi in 6 months. However, my mortgage guy said that the way the properties are structured, (three parcels in one deed) they may be unable to do a market comp, as its very uncommon. I would then have to apply for commercial loan.
Is this deal worth the extra effort? On paper, this would give me a pretty decent cash flow if I managed to finance.