Invest $50K+ for a 7% Return on a Multi in JAX 32208?
Hi BP community, I would like advice from folks who are familiar with the Jacksonville FL area or looking for just some general feedback.
Last year, we purchased a multi-family for about $170K in the 32208 area code. It has a 3/2 house in the front, and a stand alone garage + 2/1 apartment on top. The front house is fully rented/rehabbed.
The garage apartment we had intended to turn the garage area into a living space, put in a stair case and make it a 3/2 house. We hired a terrible crooked contractor who did an awful job, didn't submit permits, and we need to fix a bunch of structure stuff now after he cut into a load bearing wall. *I KNOW it's been a nightmare to say the least!!**
Here are the numbers so far:
$170K purchase
$24K rehab spent to date + Engineering drawings, design etc
$190K all in so far
I'm getting estimates back to fix the structure plus the city wants to add a bunch of stuff brought up to code including replacing all ceiling joists etc.
$190K Spend to Date
+ $50K Estimated Structural, electrical, plumbing, finishes, permits etc
$240K Estimated cost all in
I did the calculations and if we get decent rent for the back house we should be able to make 7.6% ish CoC return. Not ideal, our targets are 11-14% returns.
We have not been able to find similar comps in the area. I found a multi near by in same zip for 6 beds, 4 baths listed for $260K.
Quick Poll:
A) Bite the bullet and drop another $50K to finish this out?
B) Run and Sell? The garage is in an unusable state so not sure what we would get for it.
c) Other? And Why?
TIA for your time!