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I live in Pearland, TX and drive by this property all the time. It is right off a busy street 2 houses down from a fire station. It is a large 4 plex with all units rented. Some with same families for years. Almost a turn key property. It will need a new roof and all wood siding replaced with something more durable (has rot). I figure 30K for rehab. I have walked the property in all units and they seem solid. The owner is a local realtor who bought the property in 2006 for $265K and is now asking $485K. Pearland is a very looked after area, and the High Schools are awesome. If your a little league ball player, you have to be here. I worked with the calculator and the numbers seem to work at 400K. I have 2 single family homes and a triplex in my portfolio and would like to add another multifamily, but don't want to get too excited and jump in too fast. Not even sure they will take $400, but I want to get everything right and looking good before I try. All separate metered and tenant pays all utilities.
Rental Property Investor · Anchorage, AK · Member since 2018 · 56 posts · 31 votes
7y
I would double check your insurance and tax numbers to make sure they are accurate. Whitney is right about management - if you are managing it yourself that's fine - but make sure you include those costs if you end up moving again and will need to use a property manager once you move. If you plan on selling, would a cash investment that large be worth investing for a quick turnaround? That will depend on what your strategy for this investment will be.
Also take a look at your after repair value. It says your initial equity will be 130K? Are you confident that a new roof and siding will up the value 50K from what you paid for it? A property is only worth what someone is willing to pay for it, and each sale is a marker towards its true value unless serious work is put into. Just make sure you are using accurate expectations and not inflated excitement in using these numbers (I have certainly been guilty of doing the same thing to some properties).
Rental Property Investor · Pearland, TX · Member since 2017 · 94 posts · 33 votes
7y
I expect same rent as in report for a year until I do some upgrades on interior and raise it about 200 each.
I have looked up current tax info. At 265k, they pay 6k. I budgeted 12k at a 400k purchase price. All in all it looks to me like 100k per unit and each bringing in over the 1% rule. In Pearland or Friendswood that is pretty good in my opinion.