@Audrius Pauliukonis, the first red flag is that this property has been on the market and pending sale 4 times since 2015. Each time the sale didn't go through. Why? Why did 4 buyers walk away? Most recently in July of 2017 for $115k. That's a good place to anchor your negotiations.
Regarding your analysis:
Include an initial-repairs budget. There's always something!
Looks like all the units are on 1 electric meter and heat/HW system. The fuel bill might be reasonable, but electric is probably way too low. Ask to see a T-12 from the owner so you can see all the expenses for the past year. P.S This may be an opportunity to add value, depending on how much it would cost to split out the utilities.
Repairs and CapEx is low. Figure 15% combined at least. This is a 90-year old property, on the water, with a flat roof.
Is this in a flood zone? Is flood insurance required?
@Audrius Pauliukonis, the first red flag is that this property has been on the market and pending sale 4 times since 2015. Each time the sale didn't go through. Why? Why did 4 buyers walk away? Most recently in July of 2017 for $115k. That's a good place to anchor your negotiations.
Regarding your analysis:
Include an initial-repairs budget. There's always something!
Looks like all the units are on 1 electric meter and heat/HW system. The fuel bill might be reasonable, but electric is probably way too low. Ask to see a T-12 from the owner so you can see all the expenses for the past year. P.S This may be an opportunity to add value, depending on how much it would cost to split out the utilities.
Repairs and CapEx is low. Figure 15% combined at least. This is a 90-year old property, on the water, with a flat roof.
Is this in a flood zone? Is flood insurance required?
@Jaysen Medhurst Wow, this is what an experienced investor brings to the table. I'm such a newbie, I looked at the report and was like, "duh, that is a great buy!" But you were able to look at it and easily see the red flags to pay attention to. Thank you for bringing your experience to the table here on the forums! I'm sure Audrius appreciates your response because I sure do!
Glad you found it helpful, @Nathan Spitz. One of the great things about BP forums, and this one in particular, is you get to see so many deals and analyze them. You can run the numbers/do the research on 100 deals here in the time it would take to do 10 if you were just looking at your local MLS.
Thanks so much for the input, @Jaysen Medhurst, it did seem a little too good to be true - and it was. My agent had a hard time getting a hold of the selling agent; I submitted the report before I knew the whole story. Just found out last night the place needs a new roof, new furnace, etc., and the seller is pulling the listing as they're getting tired of the low-balls. The up-front repair costs here are indeed the deal-killer. I do believe I'll seek elsewhere...
I just visited a property today that holds significantly more promise, I'll try and get a report up here soon. This forum is indeed a great resource and learning opportunity!
@Nathan Spitz, I sure do appreciate what a set of trained eyes can see...as they say, it's what you don't know that you don't know that'll bite you...good luck in your own search!