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Updated over 4 years ago,
Newbie investor - deal review help needed!
Hi I'm a new investor and looking for my first purchase to buy and hold. I ran the numbers on 2 deals and I'm hoping I can get some help from those more experienced! I live in Brooklyn and am buying upstate New York in the Sullivan county area (2.5 hour drive from nyc). I have found 2 opportunities and have listed main numbers below - I am just still not sure which (if either) to go for. Or if I should be more patient until I find a better deal.
Property # 1 - Duplex - 2 units x 3 beds - Cost $155k Deposit 20%
Rent:Unit 1: $750. Unit 2: $1100
Improvements: roof and front stairs - $25k
Monthly cash flow: $376 per month (total)
Income $1850
Expenses $1473
CoC ROI: 7.41%
**Note: $750 for the first unit - tenants are elderly and have been there 25 years and would not be removing them or hiking the rent up. Second one currently has month to month tenants but could probably get another $100 from a new tenant
Location: excellent - property is 10 min walk to the town Condition: Very well maintained overall but owner said it needs a new roof and new front steps and is priced accordingly. Good appreciation potential as the town is getting much more popular. There are not really any other multifams to comp with but 3 bed houses with sim square footage are around $200k. Median rent for 3 bed is $1250
Property # 2 - 2 separate Farmhouses
Cost $185k (for both) Deposit 20%
Rent Unit 1: $1100 Unit 2: $1100
Improvements: None currently but will need some work when tenants move out
Monthly cash flow: $374 per month (total)
Income $2200 Expenses $1825
CoC ROI: 10.7% Currently both farmhouses are occupied with long term renters
Location: Good but not walking distance to anywhere
Condition: When tenants move out will need new kitchen and general clean up
Same situation with comps, there are also very few long term rentals in this area
What advice I'd love is if you would recommend buying either of these? And if yes, should I look solely at numbers to decide or should I take into account appreciation of the first property? Or are neither of these good enough for the work involved? My plan would be to rent these out and not flip at this stage.
Let me know if you need more questions answered before you can comment.
Thanks so much for any help!