first deal

[Shaun Carl]

hi guys,

Its been a while because I have been working on getting my first property. I think I finally found it. Let me know what you think.

I actually found a place that looked like it needed some work on Craigslist. So my partner and I went to look at the place with another guy who will do the rehab and then most likely manage the place. He has been doing this for years and has many of his own properties. He is a family friend and soon to be family so I trust him and his opinions.

We first arrived and the outside looked in pretty good shape. But there was garbage outside. The sellers gave us the code to get in the place to look around. I believe they bought it as a foreclosure and are reselling. It was listed as a 9 bedroom 5 bath 3 unit place. It is located in south buffalo which is not the best area but not the worst.

The first unit had pretty new flooring in the kitchen and bathrooms but needed all new carpeting. Some bedrooms were small but not bad with tons of closet space. This unit also led down to the basement. Down there we found brand new hot water tanks hooked up.

Second unit was actually a 2 bedroom unit with the shower and toilet in separate spots. This one needed new carpeting also.

Third unit was also a 2 unit with one bath. Again needing new carpeting.

Lastly we found that there was a 4th unit in the back. This unit had a separate basement again with a brand new hot water tank. It is a two story with the whole upstairs as a master bedroom.

This place also had a brand new high efficiency furnace.

Now the place needed a ton of cleaning but everything major was there with many new things. Maybe someone started to fix it up then stopped. Not really sure. The selling company is out of Austin I believe. Amazing that they had it listed as a 3 unit and it ended up being a 4. What luck!

So the numbers.....

They were asking 50k

We countered and they ended up accepting 44k including all their fees to close.

I am paying cash for the whole deal (equity partner) while my partner is taking care of all the work making calls etc and running things by me. This is our first deal.

The rehab should cost 10-13k to get rent ready. Total rent for the 4 units is estimating to be about 2200/ month with a cash flow of 275/unit using 50% rule. Hopefully after the place is fixed up I will list it for 135k willing to take offers around 115k and collect rent till I decide to really get rid of it. I am also thinking of refinancing to pull back out my equity to look for another deal. Which is what I want to do full time.

I feel like this is a steal. Anyone see anything I could be missing? Or any other problems that may arise?