Looking for some advice on my first deal in MA.

[Corey F.]

Hello all. I'm new here and this is my first post on the forums. I've been absorbing a ton of knowledge from you all and I'm very excited to get started in REI! I'm looking to purchase a 3-family home in Massachusetts to renovate and rent out. This would be a 203k purchase with 3.5% down and all of the renovations added into the mortgage. I plan to hold for at least 5 years.

This is an early-1900s home with three identical 2 Bed/1 Bath units. It is not in the greatest neighborhood, but the particular street that it's on seems fine. It is located close to colleges and MBTA commuter rail. Per FHA requirements, I'd be living in one unit for the first year, and would rent the third unit after that.

The home needs a lot of work, including lead paint removal, some asbestos removal (don't know of the extent yet but I'm planning for the worst), new roof, new siding, rewiring, and an interior gut and reno (kitchens, bathrooms, etc). I'm budgeting $100k for the renovations and am hoping to make that work, although I haven't had any estimates or anything yet. I haven't had any inspections or even made an offer on the property yet so all of these numbers are very rough conservative estimates, and I'm trying to plan for the worst. This is just very early planning to see what I might be getting myself into if I were to move forward.

Purchase Price: $60,000
Renovations: $100,000
Down Payment: 3.5%
Terms: 30 Yrs @ 4.5%
ARV: $229,000
Taxes: $3000/yr
Insurance: $1000/yr

Rent: $1000/unit (2 units first year, 3 units going forward)

What do you expect that I might spend per month on maintenance, property management, and vacency? Does my reno cost seem realistic for a home this old? Should I expect high maintenance costs for a freshly renovated home? What should I expect to pay for closing costs and other FHA-related fees?

Thoughts? Suggestions? Thanks!