Nu B may have caught a tiger by the tail needs help
While driving for $ I found an older run down house in a low rent street. The owner responded to my post card and we met. As it turns out he has been a landlord for some time and is getting out of being a landlord. He has his last 7 properties he wants to get rid of preferably as a package deal.
The houses average 900 sq ft and as listed don't have bedrooms (0 beds means no closet?)There are 4 houses from the 1950's in terrible shape (inhabitable) and have been vacant for a couple of years. These need new roofs, facia boards replaces, windows replaced, who knows what the electrical would be, plumbing is questionable, the furnace/heaters are either missing or striped (no AC), the bathroom fixtures are in place though old, the hardwood floors, while solid, will need a lot of works to restore and the list goes on. The other two houses have long term tenants paying rent less than the going rate for an up-to-date house but due to the condition of the houses the lower rent might be justified. One of the houses (circa 1930) has the high ceilings (a drop ceiling was installed in the past but it is in tatters) and currently has squatter in it). The yards are a jungle but only minimal trash. None of the houses are crack houses and none purposely trashed (no walls torn our or fixtures broken, etc). One or two years ago the owners was renovating the properties when he decided to throw in the towel and all rehab work was stopped. I was able to go into 4 of the houses but the work to be done was really too much to write down. Suffice to say when I walked in it looked like total rehab was needed. I have a "lite" acquaintance who is a realtor and residential contractor/roofing contractor in my city that I am speaking with about this project but the properties are 200 miles away. I am reaching out to a local residential contractor for additional support in evaluating the houses if I need to.
These houses are the "ugliest house(s) on the block". The other houses on the block are mostly well kept though old and tired. The adjacent streets/neighborhoods the houses are circa 1970s and very well kept nice lawns. Three of the houses are close to each others (properties almost touching) while the others are spread out but on the properties are within 2.5 miles radius. These houses are not located in my city but 200 miles away. The comps for the "newer" houses (circa 1950s) is about $34,000 while the comps for the 1930 house is $15,000. This is based on the estimated value "icomps.com" gives the properties but when I run a comp on each of the houses based on #BD/BA, Sqft, Age, and sold dates the comps I get are not much different.
My problem is this is my first real deal (although I have 2 other much simpler deals I am working one right now in my city) it complex in that some much work needs to be done and the low value of the properties. I don't know if this is a deal that makes sense pursuing. I am hoping the owner will give me an option to let me buy certain properties without buying all 7.
Anyway I am so inexperienced I don't even know what I need to ask. I don't intend to hold these properties I just want to price repairs correctly, look at the possibility of a buy and hold. I don't know if I am seeing all the obstacles and traps I need to be wary of.
If anyone reading this can help with some guidance/wisdom or places I need to look to please contact me.
Doug