8-unit in Jacksonville FL:smash or pass?

Question

List price $695k

Gross rent $65k

Class C neighborhood

100% occupied

75% section 8

Average rent per unit $675

Market rent $750

Request any other details.

Basit Siddiqi · Answer

I don't think there is enough information to give you a valid answer.If these units are approx 750 square feet as either a 1/1 or 2/1 - I think I would pass and only take it if the asking price dropped to $600,000 - $650,000If these are bigger, approx 1000 square feet and a comfortable 2/1 - I think I would take it.These are the comps for multi's in 32205 in the past 90 days2921 Olga Pl - $390,0002878 Selma St - $325,0001419 Wolfe St - $310,0001156 Denaud St - $240,0003333 Phyllis St - $82,700

Carrick Young · Answer

@Charles A. agreed with @Andrew Carlson. The broker reached out to me on this as I bought a duplex that was part of his comp set (the 8 unit is 4 duplexes). For reference, I bought my duplex for 67.5k/unit and they want just under 87k/unit. When I told him about the value add strategy I aim to implement he even agreed that this was not the deal for me. 32205 is good in many respects but this is a deal for someone who has money and needs to place it.

Andrew Carlson · Answer

@Charles A.

With a price more than 10 times gross rents I would pass.

Charles A. · Answer

@Basit Siddiqi

Thank you.

Update:

Closed the deal at $595,000.

Charles A. · Answer

@Carrick Young

This is the danger of OOS investing lol.

3333 Phyllis is actually a single family home (not duplex) that was on the market several times in 2018 and 2019 for $120-130k and then sold to a "we buy homes cash" outfit for almost $.50 on the dollar. It wasn't even being marketed when it sold.  I can only surmise they were desperate to sell quickly. The last duplex that sold nearby on Gilmore reflects approx $150k value.

The FMV for duplexes in this area of Murray Hill is ~$150k-$175k,unless you’re buying something with hidden traps!

I’ll keep you all updated.

Appreciate all input.

Carrick Young · Answer

@Charles A. yes! My duplex is on Gilmore.

@Basit Siddiqi Thanks for providing the comp list! While Olga, Selma and Wolfe are in 32205 - the area is not comparable to these duplexes. Those 3 comps are in a much better area. I put in an offer on Denaud which was a triplex. Phyliss is the only comp that is relevant.

Charles A. · Answer

@Carrick Young

Was your duplex in 32205?

Charles A. · Answer

@Jake Baker

32205

Jake Baker · Answer

What neighborhood/zip of Jacksonville is it located?

8-unit in Jacksonville FL:smash or pass?

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