Hi , Im looking for help, Can we analyze this?
looking for guidance , not purchasing but looking to see how you would go though with this
Before looking at the deal, I would ask How I plan on financing it.
This is a condo, and you would have needed to buy in cash.
You would want to know the rental rate for the area, how much would this condo rent for?
Ideally you want to hit the 1% rule.. A general rule of thumb shows this property is at 129,900 so the rent you would be looking for monthly would be 1299/ a month.
Also its a 3 bed 2 bath 1241 square feet- who is your target tenant?
I know this is a condo, But are you looking to learn to analyze multifamily 2-4 units? You want to begin to look at properties that fit your goals
@Javier Medina Well, we're a little late for this one. It's contingent, meaning that there is an accepted offer after 1 day on market. It was listed at $129,000, which sounds good if you say it fast - but read on.
The description is 3 beds, 2 baths and it needs repairs. There's only one photo and it's of the exterior, so that tells you that it's either occupied with a hostile tenant or it's so much of a wreck inside that they didn't think photos would help. Public record states that it was purchased in 2005 (just before the peak of the market) for $220,000.
It's a "condex" (duplex condo). The first thing I look for in a condex is whether there are reserve funds. In this case, there are not - that's disclosed in the listings. It also says there's no condo association and no budget (for normal maintenance and repairs).
So if the roof needs to be replaced and your neighbor can't afford to pay for his share, and there are no funds in place to cover the cost, you're going to have to pay for it yourself to prevent damage to your unit. And then you'll be in the unenviable position of having to collect from your deadbeat neighbor.
Good luck to you and the Red Sox.
Condex rules tend to be much more lax than larger associations. They might well also allow either or both sides to rent their unit. If they do, you'll be 50% or 100% non-owner occupied meaning that it will be very difficult for a buyer to find a loan when the time comes to sell.
There's also no condo association to fine the other unit's owner for excessive noise, failure to keep the exterior and yard well maintained, parking a dozen junk cars in the yard, etc.
I *hate* the location.
This property is about 1,200 feet from the Merrimack River. Might well be in a flood zone.
It's also less than 100 feet from the off-ramp from Interstate 495. There will likely be significant traffic noise, including big trucks using jake (engine) brakes to slow down. Not to mention that you're less than 800 feet from the travel lanes of I-495. Even if you don't mind, you have to think about tenants or buyers when you rent or sell.
Did I mention that I *hate* the location?
Now on to the real problem. It's a short sale with a price that's not yet approved by the lender.
That means two things:
1. You have no idea what the final price will be, especially if there are 2nd or subsequent lien holder(s). I've seen a 2nd position pop their heads up at the last minute and demand thousands more - which cannot be financed, or the 1st lien holder will take it. You have to pay in cash at closing or the sale falls apart.
2: You have no idea of when you will actually close. It's common for the lender to keep pushing the closing date out multiple times as "closing" nears. My last one got pushed out 5 different times and took 9 months. I've heard other agents say they've had short sales take 3 years.
Comps - within the last 9 months, there was one near-identical comp sold within 1/4 mile. It's a 2 bed, 1 1/2 bath half-duplex at 2 Woodland St, Unit C. Average condition, sold for $210,000. Then again, 26 Storrow St, U26 was a 2 bed 1 1/2 bath that was a bit smaller at 976 sq ft, also in average condition and sold at $123,000.
If it were me, I would not be interested as an owner occupant. Maybe as a buy & hold - as long as you understand the risks of a short sale and of being a landlord in Massachusetts.
My bottom line would be I'd offer 10% over asking to try to get it under contract. Use the home inspection to negotiate the price down if it shows significant defects.
How's that for an analysis?
Amazing so many things to be looked at , thank you so much ! This was an absolutely amazing lesson .
I learned so much , with your analysis I have been going over this property multiple times and learning something new every time
The reason I picked this one was because it was so odd I knew it wasn't something normal I wasn't hearing or readimg about