Hi Everyone I need help analyzing my first deal. Any help will be greatly appreciated. I have added $10,000 for repairs and upgrades and the rents currently are $825 but I believe I can easily bring the rents up to $1,100-$1,400 because each unit is 2 bed 1 bath with washer/dryer in unit. I have left the after repair value as the same not sure if that is correct but wanted to see worst case scenario.
Rental Property Investor · Prairie Village, KS · Member since 2015 · 2k+ posts · 2k+ votes
7y
@Amaury Ortiz
This looks pretty good to me! I would calculate the ARV based on both comps and the income approach (cap rate). Will you really pay 10% for PM? Do you think you might need more than 10k to renovate each unit and get it up to those higher rates? If you redo kitchens, baths, paint, new appliances, you’re looking at a lot more that 2.5k a unit. So make sure you get a basic rehab budget together on what it will really cost you to get to those market rents!
@Lee Ripma thank you for the reply! there isn't many comps in the area but with the comps I did find I was looking at an ARV of value of $350,000. When I did the income approach (assuming i did it correctly lol) the value was coming to $345,000. If you think that seems incorrect please let me know. In regards to repairs I put $10,000 as an estimate since the units are fully rented but I figure $15,000 if i use all my contacts for rehab but I could be underestimating even at that.