Thoughts on this Deal?

[Brian J.]

Listed for 360k

2 Single Family Homes (Built 1919)

1 Duplex 

3 adjoining parcels

I would likely finance 75% and this would be my first investment properties. This would be used for student housing near a college. 

Tenants pay all utilities. 

4 Washers/Dryers/Range/Refrigerators come with properties.

All roofs approximately 10 years old. I am a Realtor so I would get 3/2 on the deal as well.

Any thoughts would be much appreciated. I have a couple investor friends looking into it but wanted to extend to the BP family.

Thank you!

Unit 1 1347 SF 3Beds 1 bath $930 (up to $960 later this year)

Unit 2 1184 SF 4 Beds 1 Bath $1200

Unit 3 1284 SF 4 Beds 1 Bath $1200

Unit 4 780 SF 2 Beds 1 Bath $780

[Nicholas Misch]

Quote from @Nathan Grabau:

On my first pass this seems like a really good deal. The next two things I would be curious about would be how they look/ how recently they have been updated, including HVAC/ water heater age, and the last time the properties were renovated. I would also want to know where these were. With my quick calcs, 90k down, 270k loan at 6% for 30 years, leads to a cash on cash return of 15% a year without doing anything fancy makes me think that you are in a market like Cleveland or Flint that the population is declining. I personally will not invest in an area with negative population growth. My whole thesis for owning real estate has to do with scarcity, and if the population is declining (half as many people live in Cleveland as they did in 1970) scarcity is not an issue in that area. If this is in a location with a growing or even stable population and the units are in good shape, this is a great deal! 

Great analysis except the Cleveland declining part. Yes population has declined in Cleveland year over year (it has slowed considerably) and I know to many investors that’s an important factor, as it should be a consideration in the whole picture, however Cleveland as a whole is a huge city that still has a large population and an inventory shortage both to buy and rent so regardless of the population issue there will be no difficulty in renting units anytime soon.