2 Deals to Analyze: Rochester NY
Hey everybody.
New investor here with my first BP Post <gulp>. Also going to try and get a look at both of these properties tomorrow afternoon. That will be a first as well. I'd be lying if I said I wasn't nervous so I'm curious to see what the BP brain trust thinks of these 2 deals before I proceed any further:
Algonquin: Duplex with two 1/1's and a 2/1. Rent projected at $1425. $49,500 for the property and I'd say this one is a C- neighborhood. Pics look good except the roof so I'm estimating $15k to get it up and running. By my calculations that would leave me with a cash flow of about $600/mo. Here's the listing on Realtor.com:
Adams: 3-plex with two 1/1's and a 2/1. Rent projected at $1600. $74,900 for this one and I'd say this it's in a D- neighborhood. Everything seems pretty good on this one so I'm only estimating $3k to get it up and running. By my calculations that would leave me with a cash flow of about $528/mo. Does that seem right? Here's the listing on Realtor.com:
I'm including property management fees for both as well. The plan is to try and look at both tomorrow, review your comments, take a last look at the numbers, pray for divine inspiration, and then make an offer. I'd pay with a combo of cash and HELOC and then use a convention mortgage once rehabbed and rented.
Do these look like good deals to you all?
Thanks!
-paul
Most Popular Reply
@Paul Reynolds Welcome to BP and congrats on starting your real estate journey!
I always start by looking at the city/town, then dive deeper into the properties themselves.
According to my tool, Rochester, NY looks interesting - crime is decreasing and the levels are good, property values are going up and income is growing strong. My only concern on the city/town itself is the population. I don't like to see an outflow of people.
Now, about the properties themselves. Others have already mentioned this, but neither seem that enticing from an ROI perspective, and your estimates seem a bit low in terms of CAPEX/repairs/maintenance. One of the biggest things to remember when estimating these figures is that some of those costs are "fixed", such as roofs. Of course, the price of a roof isn't fixed in that its always the same price, but the cost of a roof for a 1,500 SQFT house that costs $50k isn't much different than a 1,500 SQFT house that costs $150k, but the former is a much larger percentage of monthly rents, and must be adjusted accordingly.
Hope this helps.
Robert Leonard