Berrien Springs, MI · Member since 2017 · 2 posts · 0 votes
The home is in a great location, and if I use the home as a short term rental (which is my plan), projected cashflow is $4,500 per month. Home costs $100,000. It's a no-brainer except for two concerns.
1. Home is zoned commercial and the city will not budge. The home is grandfathered in, as in, they won't demolish the home until it is either unfit for habitation or is burned down in a fire.
2. The home sits on a hill, and the home is sliding off. A $10,000 investment will fix the foundation issue.
Is there any reason you wouldn't buy the home if you were in my shoes?
Residential Landlord · Houlton , WI · Member since 2014 · 56 posts · 35 votes
8y
$4500 a month cash flow on a $110,000 purchase sounds suspicious to me are you sure about that?? I would definitely verify the commercial status and any restrictions for renting. Something doesn’t seem right about $4500 a month on $110,000 purchase that’s one hell of a deal if you could pull it off. Just do your homework.
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
8y
Are you sure the City will allow you to have a short term rental there? If when you apply for permits to repair the slippage, is it possible the city will consider it new construction and require a use under the commercial zoning? Do you have a bid from anyone so that you KNOW exactly what it will cost to fix the issues? Those types of problems often end up being far more costly than people imagine if you have to put in retaining walls, etc.
1. Commercial can be a really good thing. I have seen homes sold at double their value just for the commercial land underneath. High traffic area could worth good money for a fast food place or bank. Even if the location isn't that valuable, it sounds like you are grandfathered in so short of total destruction it shouldn't matter.
2. So the total investment is $110,000 for $4500 per month. Looks pretty good.
Residential Landlord · Houlton , WI · Member since 2014 · 56 posts · 35 votes
8y
$4500 a month cash flow on a $110,000 purchase sounds suspicious to me are you sure about that?? I would definitely verify the commercial status and any restrictions for renting. Something doesn’t seem right about $4500 a month on $110,000 purchase that’s one hell of a deal if you could pull it off. Just do your homework.
Berrien Springs, MI · Member since 2017 · 2 posts · 0 votes
8y
Thank you all for your feedback.
@Neil Hauger, you are correct. I am off on my numbers. I brought a foundation specialist out, and it will be cost prohibitive to repair the foundation (unless the seller cuts the price in half). Time to find another deal.