Hello all, 

Here is a property I have been going back and forth on if I want to offer on. I am a new investor looking for a buy and hold multifamily purchased with an FHA loan that I will owner occupy and manage  until I can find another in order to start to scale. I am looking for at least 10% coc and at least $100 cashflow per door. 

This is in Holyoke MA. 2 unit top/bottom with 3 beds 1 bath in ea. all updated and move in ready. Newer mechanicals (2 yrs) and both units seperately metered. 2 sets of Laundry units in basement in seperate room. 

The kicker! The basement is finished and would make a great studio/1bedroom. It has a finished bathroom but no kitchen and no heat but two points of egress. I would need to put in a seperate electric panel for the third unit as well as HW heater, electric baseboard heaters, kitchen, and anything else to bring it up to code. 

The property is zoned as a 2 family but would not need to be re-zoned, would just need architect plans drawn up and submitted to the city in order to have legal third unit.

Exterior needs new siding, front is brick but rest is wood shingles, would replace with vinyl. 

My concerns are that Holyoke is not the best city, not very good schools and high crime in the downtown area. This property is not in that area and looking through the police reports shows little to no crime in the neighborhood and no violent crimes. Would be very diligent in my screening process. 

Analyzed as if I was moved out and getting income from all 3 units

Numbers:
Price: $340,000
Beds: 7
Bath: 3 
Size: 2790

Loan: FHA, 30 yr, 
DP: 3.5%  (11,900)
I: 2.6%

Rehab: 
$20,000 ( siding, electric baseboards, HW heater, Sink, Stove, Fridge, Cabinets/counters)
Not terribly familiar with rehab costs and cant get free quotes cause I don't own... 

Income: 
Unit 1: $1300
Unit 2: $1300
Unit 3: $900

Expenses: Monthly
P+I: $1313
Taxes: $389
Ins: $327
Owner Utilities: $105
Repairs: $245
Vacancy: $175
Management: $350
Capex: $175

NOI: $20,802
CoC ROI: 12%
CashFlow: $420/ month

You all rock and I thank you in advance for any comments! 
If you are local feel free to reach out and we can chat about REI

Hey Ryan, I’m still new to investing, I’ve owned my home in Holyoke for a little over 2 years now, but I’ve lived here my whole life. Willing to assist any way I can. I think it’s a good city to invest in, long as like you said - screen your tenants properly. 

Let’s chat, but I think also run your numbers without the unit in the basement, how does that work out for you? That can be your worst case scenario. I think turning that basement into a rental is a great plan though. But also I think 20k may not be realistic for all you are looking to do. I could be wrong but just my feeling. Estimating those things is something I need to work on myself. Let’s definitely chat further on this deal and investing in Holyoke in general 

@Ryan Breen appreciate the response! Yeah as im looking into it more the rehab cost is going up for sure. Unfortunately it doesn't make much sense without the third unit at that price long term but I may try to get creative. Im at the point where I want to buy a property but dont want to be too lenient on my criteria just to make it work.

I get that. I have seen some 2 families come up that seem like that might work for you, I’m looking to make a purchase soon as well but I don’t think I have the financing at the moment. Not saying this couldn’t work, but there are options. We will chat some more