Is this Multi Family a good investment?

Question

I'm looking at a Multi family (2 houses with a total of 11 units) being sold for $115 in PA.  I'm not very familiar with PA but what I've looked at online it seems rents are from $550-900 a month.  Both houses are in need of significant remodeling.

My plan is to purchase and then put about $125k into remodeling the properties. It should take in $7000-8000 a month when completed. I will have $240k into the property and will then look to take out a mortgage to recoup my investment.
I'm new to rental properties and want to make sure that I'm not over looking something that will hurt me in the long run.

I feel like it would be very profitable and want your feed back.

$240,000 invested with a couple months of me doing most of the construction work and then cashflowing $4000+ a month.

Am I at risk of not being able to attain a mortgage when I complete the BRRR?  There is a college near by and its a populated area,  am I at risk of a high vacancy rate?  Thanks

Mason Scholtes · Answer

Hey guys,

Thanks for the response.  I hear ya.  It's a big project.  I've been remodeling houses for years however and have flipped homes before.  I'm worried about the rental aspects.  I have factored in the management costs as I don't plan on doing the day to day management of the property.  I am looking for top returns from any project I do.  Do my numbers sound like a good return?  I'm not married to a location but I want the best return anywhere in the country and I will chase that deal if it makes sense.

Play big or go home right?

Dick Stevens · Answer

I think everyone that’s new to rental properties should dive into an 11 unit property in need of renovation that exceeds 100% of the purchase price.  Sink or swim I guess.