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Updated about 10 years ago, 10/29/2014
Small 4plex deal: What would you do?
FYI - my exit strategy is to build out 1 unit and wholesale to another investor for 30K. If that doesn't work we'll buildout the other 3 and collect the rent until we decide to sell.
You can do electrical drywall plumbing flooring (and presumably kitchen and bath) for $2500-$4000 per unit?
That sounds really aggressive even with some stockpiled materials (which you should still assign value to).
We have a contractor we've been working with for a while. He's done work on all our units and my partners personal residence. The units are only 650sf. We walked through the unit yesterday and that's the price he gave us.
Have a rough breakout of costs? Time, materials, etc? Seems impossible...less then $7 per sf including appliances, fixtures, cabinets, electrical, plumbing?
@Jarred Black If your getting the property at 9K I would say you still have some room left if the repair costs run higher. Even 6K a unit repairs and this still looks like a good deal if you can rent it for $1,500/m --- But I have a hard time wrapping my head around any house for $9K that isn't in a war zone or a tear down. Good Luck - let us know what ends up happening.
I'll keep u guys posted. From the looks of the place it seems the owner started to rehab himself but ran outta money. Bathrooms already framed. Some plumbing already installed, plus there new windows, drywall, vanities, toilets, cabinets, insulation etc in the building that's included in the deal. The neighborhood is solid, not the best but definitely not the worst.
"plus there new windows, drywall, vanities, toilets, cabinets, insulation etc in the building that's included in the deal."
Gotcha -- makes a big difference. If the vast majority of materials are there you might get by with a few thousand in labor.
Welcome to BP.
What town is the property in? Because reselling will heavily depended on location.
It seems like a good deal at 9K. I asuume $10 a square feet will most likely be your minimum rehab cost.
Hope it helps.
@Ronald Perich the seller wanted a quick cash sale. Iran he wanted us to close in 2 weeks. We didn't have the cash at the time so we tried to do a 60 day close with a deposit. The seller didn't go for it, so we told him we'd give him a call back in November to see if he still had property to sell. We'll be calling him back next month. I hope he hasn't sold it.
@James Syed the property is in Granite City.
Anyone play in that market for a small 4plex?
@Jarred Black Have you done rentals in Granite City before? You'll have to have your business license completed and they do a pretty thorough review of the property before it's granted occupancy permits. They always seem to find something that need to be redone. I'd check to make sure permits were pulled for the first rehab or you might have to re-do a lot. Also, don;t forget one of you are required to take the Granite City Crime Free Multi-Housing seminar (or have your property manager take it). Your rents seem reasonable if it's around the area I think it is, but I would plan for some challenging renters from an upkeep and collection perspective.
Welcome to BP.
Nice Job @Ronald Perich
Sometimes they make it too difficult to obtain your occupancy permit.
@Jarred Black Send me a private message including your phone number. I have got some clients who purchase multifamily. I am also an investor.
Seems like an amazing deal to me depending on where it is and how much repairs will cost.