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Updated about 7 years ago,
Novice Investor - Can you help me validate this deal?
Hey BiggerPockets, I'm a novice investor hoping for your thoughts (validation?) on a potential investment. For context, I own a couple of condos that generate a decent net profit of ~$375/month each. Now, I'm making the jump to an 8-fam.
Here are basic parameters of the deal...
- Location: CT
- Size: 8 residential units (2 bed / 1 bath; 988 sq. feet each)
- Purchase Price: ~$66k per door
- Other notes: Each unit features a private deck and parking, kitchens are slightly dated but overall these are easy rents in a stable area; building is brick exterior, sturdy, and well-taken care for (seller spent $xx,xxx on a new roof, upkeep, etc. over last several years)
Without getting into too much detail, the P&L provided shows net profit of ~$250/door. However, rents are below market and expenses can be tightened up. Brought up to market rents and a few tweaks, I'm confident the building (at full occupancy) can realistically net ~$2,500/month plus or minus depending on repairs and maintenance.
What do you think? The expected per door profit is hovering around $300 which seems a bit low — but perhaps that's just my skewed perspective having experience with single family / condo investments.
BP, is this a good deal?