I have a lead on a multi family property I the surrounding area of Philly, and I need some assistance on how to analyze the deal and how to market it.
The issue is that it's a 6 bdr property that would need to be converted.
I figure those costs would be much higher than a normal fix n flip and also what's the best way to market that to potential buyers?
Any help is appreciated. Thanks
I would analyse the property as an underwriter or an appraisal. Some of the things they will consider is the Pro Forma (Income / expenses...NOI), cap rate in the area, location and condition.
When you say that it needs to be converted...what do you mean? Is it zoned as a single family and you want to convert to a multi family?
Thanks @Andresa Rosa
Yes it is zoned as a SFR and it would need to be converted to a multi-family. I am thinking that I could attract more buyers this way because there may not be thank much of a market for 6bdr SFR's.
I will have to really estimate most of the data that investors really want to see, because as stated its as it sits now a SFR.
Andresa is Correct
Also Tyrone you can try this approach i use to attract buyers to this deal
Find properties that have sold in that local area in the past 180 days for cash. Try to stick with homes as close to the property that you have as possible. If they have bought these properties in that area cash, chances are the got them at a discount. This is by far the most target way i have found to get buyers and to create a "targeted" buyers list for your property. You can typically get leads like this from an agent or an online title company.
Another thing you could do is search for owners in the are who have income properties in that are.
Search this site for more buyer tips!
Have a great day!
Convertion always takes time...keep that in mind.
Either you estimate like an appraisal (a mean...a good one!) or the investors will.
The analysis of a 6 unit (commercial deal) and a 6 bed SFR (residential deal) is completely different. Look at what is happening on the neighborhood. More rentals demand or single families?
I looked at 6brs in the area and they actually do sell as SFR's but you have yo give yourself at least 3 months to market and sell. These types of units also don't usually call for all the frills and thrills like recess lighting everywhere and the fancy techy feel. These call for a classic natural look.
Also before converting, consider the neighbors. You don't want to make people want to move if the area is not one that caters to a multi-unit rental property. It could drive your value down over time.
You guys make learning this process so much easier (School of Hard Knocks). Thanks for the assistance and comments. The time to convert the property as well as the actual makeup of the neighborhood ( SFR or Multi Units ) is something that I hadn't thought of when the idea came to me.
I'm thinking that it may be a easier sell to a end buyer as just a SFR is the numbers work.
Great luck on the deal, I guess the only difference is with buyer's funding. With a 6 bedroom house conventional loans are welcome, past 4 units things get tricky I think.