New From Charleston, First Deal in the Bag
Hello BP,
My name is Robbie and I am a new "investor" in Charleston, SC. I work full time on top of "real estate investing." I am a military pilot stationed in Charleston. I just closed on my first deal last Tuesday! It is a triplex, with 1 main unit and a 2 story duplex. I thought I would be knocking it out of the park with this first one, but now I am having some doubts and minor set backs. Here is the deal:
Listing Price: $315k
Offer Price: $305k
Final Price: $311k (closing cost rolled into loan)
~2400sqft split between main unit and duplex (1200 main, 600 each in the duplex)
Financing: Used a VA Loan through a local bank, after all said and done about ~$2200 for mortage ($1500 P&I, $700 escrow)
Found off of Zillow, inherited 2 tenants in the duplex, top floor B (2br/1b) paying $850 rent, and bottom floor C (1br/1b) paying $800 rent. The owner lived in the main unit A (3br/1), and that is where I will be moving to once my current apartment lease ends.
The plan is to live in A, and renovate it gradually until my 1 year required residency is up. I will be renewing C's lease, and will not renew B's lease. When B moves out in September, I will renovate it to get better rents.
For those that like to analyze deals, the rents will be $800+$850+$1650. I plan on paying myself rent, all of my housing allowance, for the year I am staying here. After utilities, my cash flow should be around $900,
$500 of which will go towards Vacancy/Repairs/CapEx. I am planning on putting ALL cash flow into the reserve bank until I hit $10k, then I'll cut the $500 to $250/month. After I leave, I'd expect unit A to command ~$1300 in rents.
First problem: Supposed unit B is noisy and heavy-footed, which is driving unit C crazy. There is only 1 sentence in the lease as far as noise goes, and its the "will not disturb other tenants' right to peaceful enjoyment of premise." What else can I do? I've talked with downstairs, and will meet upstairs for the first time today since taking over. Beyond the "please be respectful," what else can I do? When they move out, I plan on putting down carpet to absorb some noise.
Second problem: Unit B (upstairs) does not have washer/dryer. The current tenant uses a laundromat. When they move out, I would like to offer W/D, but realistically there isn't much space left. Would a W/D "discount" work? Considering average 2br/1b rent in the area is $1200, a $100-$200 discount would be fairly attractive, and would still make my math work.
Third: Unit A has 4 rooms, 3 of them have closet. I plan on putting up a wall in the room that doesn't have a closet. One side will be a walk-in closet thats connected to another room. The other side will be a laundry room, and I will be able to move the W/D out of the kitchen. This would keep the 3br/1b configuration and 1br will become a "master bed". Would this be a worthy value add?
BLUF: What do I do about noisy tenants? What options do I have as far as not offering W/D to the top unit? Would a master bedroom option/cleaner kitchen configuration be a good value add?
Thanks in advance, pictures included, none yet of unit B
Main unit front, duplex in back:
Kitchen of unit A, notice W/D next to stove on left:
Main unit layout, planned wall in red: