Hi! I have been doing research for a few months and I think I'm ready to get my feet wet with my first deal (using home equity to fund it). I have something in mind; if anyone wants to weigh in with their opinion that would be spectacular!
The market where I am is very expensive, therefore pretty low return and high barrier to entry into the market. I thought that a good place to start would be somewhere I'm familiar with, so I started looking at properties in my hometown where prices are much lower. It's about a 2.5 hour drive from where I live. I found a 3-unit in a pretty good neighborhood centrally located to businesses and shops. Average price for such a property looks to be $140k-160k but the owner of this property is selling due to divorce and he wants to get rid of it quickly. Over time he has dropped the asking price down to $99k! It looks like it needs about $10k of work minimum to be in acceptable condition (needs new roof), $30k for full updates, but it's rented out anyway already for $2140/mo for the 3 units. One unit has bedrm and bath closed off due to water damage, it's currently rented as a 1BR but could be repaired and rented out as 2BR probably for an additional $200-300/mo.
This seems like a steal, assuming everything checks out with house inspection etc, but what makes me most nervous is I'm not planning to do this full time, I have a job and I can't be driving up there every week to coordinate the repairs and check on them. Is it feasible to do this deal and then find a local trustworthy project manager or prop manager to supervise the repairs? I'm wondering how risky that is and if it will eat too much into my returns. Any thoughts are mightily appreciated.
Moshe
