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Updated almost 4 years ago,

User Stats

45
Posts
5
Votes
Tinah Canda
  • Shrewsbury, MA
5
Votes |
45
Posts

Input regarding a possible deal

Tinah Canda
  • Shrewsbury, MA
Posted

Hello, my name is Tinah. I am brand new in real estate investing and I need some guidance over a property that I am analyzing. It's a three-family that according to my real estate agent will sell at 515k to 520K. It would need work of around 35K to update the bathrooms, boiler and water heater over the next couple of years. ARV is about 575K. The current tenants are all TAW at below average rent.

My analysis seems to say that it's not a good deal (sale price is over 70% of ARV), although if I play around with numbers it can work if I get good interest rates and increase the rent to competitive rates( 100/unit and 8% ROI). What scares me is the possibility of having to deal with eviction in addition to the repairs. There seems to be more downside for a prospective buyer in this case at the market price?

Is there a way of factoring in eviction to a property analysis?

Thank you!

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