Ranch Style Homes in Manchester

I'm currently stuck between pursuing SFR rentals or multi-family rentals in my area.  It is pretty tough to find a decent multi-family where the numbers work in my price range, so I have started to consider SFR as a rental play.  That being said I have gravitated towards your standard ranch style house for several reasons I will share below.

1. Price - Obviously being a smaller style home the ranch offers prices that allow an entry level investor like myself to get started.  I'm specifically looking for something in the range of $140K-$185K.  This seems to be the sweet spot for ranches that need some updating.

2. Age - All the ranches that I've considered seem to be built after 1950.  This is an important piece of criteria to me because I have very little experience with homes that are on the older side (built before 1930 and risk of major repairs is high).  Homes built after 1950 tend to be easier to upgrade/update and were built to slightly more modern specifications.

3. Rent - I still have some work to do here, but based on what apartments and town homes are renting at I think that I could get $1400-$1700 for a 3 bed 1 bath 1200 sqft ranch in decent shape.  All the numbers seem to indicate this is where I would most likely be able to get actual cash flow with a SFR play, but I will be exploring other starter type homes as well.

I spent some time this week looking around town hoping to identify some undervalued properties and get more familiar with prices.  Here's some of what I saw.  Keep in mind that these were all drive-bys I didn't actually get to go inside any of these.

Property #1

93 Kimball St, Listed $230,000 - Active

3 bed, 1 bath, 1100 sqft, 2 car garage

This property was very nice.  It featured granite counter tops and backsplash in the kitchen.  There was a huge yard and it had serious curb appeal.  This isn't something I would consider an investment but this certainly helped me with identifying the ARV of my potential project.  

Property #2

75 Ruth Ave, $250,000 - Active

3 bed, 1 bath, 1170 sqft, 1 car garage

This property was very nice as well.  Great curb appeal and looked updated throughout. One disadvantage that I observed was the back yard.  As you can see in the picture above there isn't much backyard space.  Again this is what I would consider a fully priced property being marketed to the end buyer, this is not an investment.  This again does however help me with getting a better idea as to what the potential ARV would be on a ranch style project of my own.

Property #3

158 Grand Ave, $161,700 - Active

3 bed, 1 bath, 1008 sqft, 1 car carport

This was a REO ready to be updated.  This was the best property available at my price point and seemed to be priced relatively well.  I calculated somewhere between $200-$300 cash flow renting this property at $1495/month after about $25k in repairs.  This home looks like it would require a brand new kitchen, bathroom, floors, paint, appliances, the works!  This was the best opportunity that I was able to find.  I haven't gone into great detail but based on what I saw I would gauge the ARV on this property to be around $200-$220k. 

I won't share the pictures but there were some other properties that were somewhere in the middle.

154 London St, $219,900 - Active, 3 bed, 1 bath, 1184 sqft, 1 car garage

118 Claire St, $179,900 - Pending, 3 bed, 1 bath, 808 sqft, No garage

216 Groveland Ave, $189,900 - Pending, 3 bed, 1 bath, 1155 sqft, No garage

100 Grand Ave, $162,000 - Pending, 3 bed, 1 bath, 1248 sqft, No garage

501 Bodwell Rd, $209,900 - Active, 3 bed, 1 bath, 1196 sqft, 1 car garage

254 Greeley St, $239,900 - Pending, 3 bed, 1 bath, 1180 sqft, No garage

355 Westwood Dr, $224,900 - Pending, 3 bed, 1 bath, 1056 sqft, 1 car garage

I'm going to do this type of analysis on cape style homes next and see what I find.  I'm not ready at the moment to pull the trigger but mostly interested in educating myself and exercising my ability to crunch the numbers.  I also need to spend some time creating a sample renovation budget for the hypothetical ranch renovation.  I will share my cash flow analysis of the REO in my next post.