I am searching for my first investment property and I viewed one the other day that has a lot of potential but I’m nervous that it might be a bit much for my first property. I’m looking for a “what would you do” response.
4 plex stacked built in early 1900s
Basement apartment with entrance at street level in the back.
First floor apartment on street level in the front.
Both top apartments are accessed through interior stairwell.
All units are 2 bed 1 bath. And the top two units have a deck coming off the front.
The top two units are both vacant and have water damage from a leak in what seems to be the roof.
There is a definite slant to the building in which the center windows on the top two floors have about a an inch difference in the gap between the window and window seal. Some water lines leak in the basement and possibly throughout. Electric seems to have been updated and it seems there has been a new gas service coming into the building but the meters and some internal piping may need replaced. Top two floors are definite gut jobs to joists.
The first floor is still occupied and we were unable to get into the apartment during our viewing. And the basement apartment is also occupied and needs updated but doesn’t seem to be a complete gut.
The cash flow potential for the building could potentially be around $1000 a month if over purchase price and rehab were on target.
Do you think it’s worth trying to move forward or leave this one go since it would be my first property?
It all depends what level of experience you have with real estate and how much capital you have to withstand the ups and downs of doing a rehab (Trust me, there will be a LOT of ups and downs, more downs sometimes).
Personally, I would avoid this like the plague. I suspect there is only more underlying issues waiting to be found once you start breaking walls down.
If you don't have that much capital or a good team of contractors. Save this one for the professionals.