Thoughts on this 600SF house??

[Robert Arquilla]

Here is the house:

Zillow.com/homedetails/1848-Lexington-ave-nw-warren-oh-44485/35541141_zpid/?

Here’s some info I gathered:

PROS

The house is in a fairly quite neighborhood maybe B- or C+. Just had the water heater, furnace and AC replaced. It looks like an older person owned and took excellent care of it. Basement was waterproofed (not sure when).

The house is affordable 36k it’s being sold by the owner and has been on the market for over 200 days. The owner has been trying to sell it since 2013 listed at 50k and has been reducing ever since. Any tips on negotiating for this type of circumstance?

CONS

School district isn’t all that great. The house is small.

I guess I’m wondering what you guys think about a house this small? Is it worth it? It looks like it should rent for around 575-625. Would it help to add a bedroom in the basement? Anyone have problems renting a smaller house?

Should cash flow around 100-150 per month conservatively (could be closer to 200) figuring on less of a percentage for capex for the first couple years due to the upgrades.

Thanks!

[Brian Roberts]

@Robert Arquilla

Hi Robert,

I'm actually in the Warren market as well, my duplex is on the other side of the mahoning river from the property in question. A few things that I can tell you and a little bit of advise on the area. Warren has a lot of potential for rentals but unlike some areas around Trumbull county, street to street can make a huge difference in neighborhood and rent. That neighborhood has one of the best bbq spots in the area and is generally quiet. Again, depends very much on each particular street.

Your rental estimates are definitely close, I'd say on the lower side of your estimate but the upper is possible. A house that size is likely to get someone young and their first place or someone of retirement age. That being said lawn service may be expected. If so your monthly maintenance number is much to low.

Also as an fyi. The city of warren has a 3% income tax on any money made in their city(your rental income) If you get out of the city into say Howland or Champion you can avoid that. They also charge landlords a fee yearly to operate a rental. I believe its $75 per door/per year. The health department will do an inspection of the property in order to get the water into your name until the property is rented. They will give you a list of things to be completed/fixed in order to use it as a rental.

Not trying to discourage you as it is all manageable. Anything else I can help with feel free to message me. I have some good people on my team that could help you in your first deal.