All Forum Posts by: David Ruiz

I was needing a contractors point of view, thank you Brian. Thank you all actually, I will keep looking for something else. Good luck to all of you!

Congrats! Sounds like you are reaping the well deserved rewards of much hard work. This is a playbook I will try to follow. Best wishes on the endeavor. :)

That is roughly similar advice from both of you so I will take a step back with this one. I think ya'll both put your finger on the fact that there will be much higher renovation costs than I can anticipate with my not having any experience. I think I will just keep my eye on it for now, and look for a local contractor to give me a estimate then consider a low enough offer that supports the numbers after including that estimate. 

Thank ya'll both, might have saved me from a huge financial mistake.

Yes, it is a little big. I am just ready to rewrite my life and want to give myself as big of a stepping stone to get there. I know that sounds reckless but I do want to skip the single unit dwellings altogether.  That said, you are correct, this property is a little larger than your average quad so I will give this even more thought before I make any final decisions, per your advice. 

As far as the use, because it is a good bit away from Chattanooga and Atlanta, eventually I was thinking of marketing to both cities as a small niche outdoor retreat/spa with a few fruit trees, campfire & yoga by the creek, bring in a masseuse/esthetician down the road etc. The venue is a good idea, I could always book the entire place for outdoor weddings etc as well. 

In the mean time, my plan would be to make it my primary residence so I can cover the majority of the mortgage with my previous rent payments. My salary would cover the entire mortgage, living expenses and small ongoing maintenance with just a little left over to save. Immediately I want rent the rooms at a discount after a quick face lift, paint, lights etc and use those rent payments to grow a larger fund and do the heavier remodeling as I go. 

With the way the market is now though, I am concerned with it getting purchased if I do procrastinate which is why I am asking advice here. Do you have any thoughts on the price? I know that commercial properties generally get valued by rental income but because there isn't any strong indicators on what the revenue will truly be, I am trying to look at it through the "comparables" lense. Although there aren't going to be many similar properties, does the price seem like it you be justified given the rural location, building size and land?

Looking at this property at 40 Blessed Way Rock Springs, Ga for my first real estate purchase ever. It used to be some type of boarding school that has closed down and being sold as a quadplex.

23,800sqft

10acres

Bedrooms 11

Bathrooms 4

Built 1972 

Price/sqft $20 ( for a house this would be pennies on the dollar but is this the same for apartment complexes, or are they usually cheaper per sqft? Whats a general per sqft price for apartments in rural areas?)

Tax assessed value: $256,150

The list price is currently $475,000 and according to the listing, potential rents are at $5,300 (potential because I think they just closed the school down and don't actually have tenants yet) which puts it roughly at 1.1% rule so seems like it just barely makes it, would be nice at 2% but we can't always windfall I guess lol. I am going to have a minimal amount for down payment and closing costs and will try to wrap as much as I can into the loan so when I ran the numbers, my cashflow, based on the estimated $5,300, was slightly more than $500 after expenses (if I ran the numbers correctly), which to me seems very tight for having such an expensive property. I might be breaking even some months but I work full time so can supplement if its ever needed. 

Some of my concerns; 

The property is in a small rural area, population less that 10,000 and its 30 minutes, 20 miles, from a medium sized city, Chattanooga, TN which is across state lines. Overall I see some general difficulty with vacancies. On top of that, because the property was previously some type of school that students lived in, there seems to be some units that share communal bathrooms and it has this whole communal vibe, which I personally don't mind but again, might hurt my ability to keep vacancies low. 

One of the perks, the property sits on 10 acres of land. But.. for almost half a million dollars, a structure this size on 10 acres of land would be a steal closer to a city but in such an isolated rural area (many farms in the general area), does the value of the land and structure justify that high of a price? 

Overall I personally like the property and the land but am I allowing that to cloud my judgement on the numbers? The $5,300 that makes the deal just barely fit the 1% rule is based on full tenancy but I am concerned on the ability of the property to appeal to broad enough group of people to ensure that. What price would allow sufficient wiggle room in the numbers that I wouldn't be so concerned with the risk of vacanies?

Or am I overthinking it and the size of the land and property is a good deal at this price regardless of the remoteness of the area and odd communal configuration?

https://www.zillow.com/homedet...