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Updated about 8 years ago on . Most recent reply
Should I pull the trigger on this? Other opportunities waiting
I haven't been too good about seeking advice in the past and have made a lot of decisions based on my gut feel and info I get from BP, but on this one I am really conflicted. So I could use some help.
I have had a duplex (16 yrs - house hack) and single (1 yr - BRRR) in north Pottstown, PA 19464. I know there are many BPers who don't like to invest in this area, but I am happy with the performance despite the borough red tape.
I found 4 row homes (same block, same layout) in the same town (a few blocks north of the 'war zone'), they were purchased super cheap by the current owner and renovated around 3 yrs ago, 3 of the 4 currently have tenants @1200/mo. The plan was to purchase in December, refi in June, payback $140k in personal loans, take the cash and look into some bigger opportunities.
Before I get ahead of myself, here are the numbers:
| Property | |
| 340 Oak | |
| Acquision | |
| $44,000.00 | |
| Expense | |
| Debt Service | $0.00 |
| RE Taxes | $2,636.00 |
| H2O | $0.00 |
| PM 8% | $1,152.00 |
| Ins | $1,200.00 |
| cap ex 5% | $720.00 |
| Operating Expenses | $5,708.00 |
| Annual Income (Proposed) | $14,400.00 |
| NOI | $8,692.00 |
| monthly Net (Proposed) | $724.33 |
| Property | |
| 338 Oak | |
| Acquision | |
| $44,000.00 | |
| Expense | |
| Debt Service | $0.00 |
| RE Taxes | $2,741.00 |
| H2O | $0.00 |
| PM 10% | $1,440.00 |
| Ins | $1,080.00 |
| cap ex 5% | $720.00 |
| Operating Expenses | $5,981.00 |
| Annual Income (Proposed) | $14,400.00 |
| NOI | $8,419.00 |
| monthly Net (Proposed) | $701.58 |
| Property | |
| 334 Oak | |
| Acquision | |
| $44,000.00 | |
| Expense | |
| Debt Service | $0.00 |
| RE Taxes | $4,078.00 |
| H2O | $0.00 |
| PM 8% | $1,152.00 |
| Ins | $1,080.00 |
| cap ex 5% | $720.00 |
| Operating Expenses | $7,030.00 |
| Annual Income (Proposed) | $14,400.00 |
| NOI | $7,370.00 |
| monthly Net (Proposed) | $614.17 |
The owner was looking to sell all 4 as a package for 200k (50k each). I was able to see the vacant unit and it looked like the quality of the reno was pretty good. Because I didn't have enough cash for the whole enchilada, I made an offer of 38k each for 3 - we haggled and settled on 44k each.
I finally got into the occupied units yesterday and while the condition is not terrible, they will definitely need some love if I want to get as much refi $ as possible. E-praisal values would have me net @221k, so after I pay back my loans I would have @81k to work with.
There is another deal though that has caught my eye - portfolio of 18 sf properties that after all expenses would net @9800/mo - currently all are rented. I of course like this cashflow better, BUT . . . . my cash would go into a down payment. I am not sure how to value the portfolio to estimate what I could get if I were to refi. I want to go for the 'big fish', but want to make sure my BRRR machine can continue run and my portfolio can grow.
Any advice is welcome (please be gentle).
Most Popular Reply
Will do, thanks!