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Updated over 4 years ago,

User Stats

38
Posts
24
Votes
Ryan Groff
  • Raleigh, NC
24
Votes |
38
Posts

Durham Rooming House

Ryan Groff
  • Raleigh, NC
Posted

I am trying to evaluate whether a rooming house in Durham is a good investment and having some trouble. I have not dealt with a rooming house before, but I know they are popular and legal in Durham, and this one seems like a good deal, but I would like to see others thoughts.

It is in a great location of Durham and my original plan was to convert it back to single family due to the fact that it is a 3,000+ sq ft 1920's build with a ton of potential. The ARV for this property as a single family is $450,000 clear as day. However after walking it the rehab would be to substantial to turn it back.

As a rooming house in it's current state each of the 8, separate padlocked rooms, is bringing in $125 per week for a total of $4,000 per month at full occupancy. I think with about $50,000 in repairs you could get $150 per door per week. Alot of these repairs are necessary deferred maintenance repairs anyway. This would total $4,800 per month at full occupancy.

I can purchase this investment for $240,000. For any investors with experience on rooming houses, would this be a deal you would do? And if not what price would make sense?