- I am looking at a SFH in Tacoma, WA that will need the heating system replaced.

Purchase price: $670,000 Cash invested: $330,000 Short term rental, sleeps 16, heated pool & game room.

Sleeps 16 with heated pool and game room.

Purchase price: $660,000 Cash invested: $330,000 16 person STR with heated pool and game room, professionally designed.

If the building is in good condition, can hold it's heat well, and has the electrical structure to support heat pumps, I think that heat pumps are a good idea.Another waste of energy and money is the tenants belief that heat is free.  

So total monthly revenue on full occupancy is $4,125/mth or $49,500 annually.Current occupancy 4/5 units with a total monthly income of $3,075/mthSelling price: $280KRehab cost: $20KARV: $300KClosing costs: $5K Loan cost: $10K, amortizedDown payment: $80KLoan: $200K, 30 yr fixed @ 7.15% APR, paying $1,418/ mth or $17,652 annuallyTotal capital invested: $105K (down payment + rehab + closing).Annual tax: $3,400 annuallyMgmt: $150/mth, $1,800 annuallyInsurance: $1,360 annuallyUtilities (water + heat): $700/mth (tenant pays electric), $8,400 annuallyExpected maintenance: $400/mth, $4,800 annuallyVacancy: 7% = $3,465 annuallyNOI (after paying the monthly debt payment): $8,623 ($718.5 / mth)Cash on cash = 8.21%How would you rate this investment opportunity?

In one of the 1890 buildings: we separated gas heat and electricity, we replaced 35 windows, finished 1,400 sq ft of previously unfinished area, stripped off the siding, added 1" rigid foam and new siding. 

I also have long and heated debates on how credit, buy down, what ever you want to call the "kick back" falsely inflates houe prices and comps as they aren't disclosed or hard to find and unwind to actual value.Short answer is the HML guys know you have less skin in the game and act in accordance.

Consider the amount of noise and heat produced by a drying cycle and other logistics if someone were to occupy that bedroom.

During this ordeal it was discovered the heat was shut off and all the pipes froze.