This would be my first deal, and just seems sloppy overall.
House: 4 units (currently totaling $1,475 monthly rent TOTAL)
Condition: 1930's historic home, in pretty POOR condition (mostly aesthetics), as owner lived OOS and really just didn't know what he was doing.
Seller: investor-owned, he's dropping all 3 properties that he owns in my town.
LIST price: 115,000
Current tenants: Bad. Slumlord bad. 1 is CURRENTLY getting evicted for non-payment by the owner. 2 are on 6-month leases, the 3rd is month-to-month.
Location: Really, really good. 1 street off of downtown...zoned commercial...It is not a "bad" part of town at all...single families nearby go from 175k - 500k.
In the property's CURRENT state, with crummy low-rent tenants, and a cool, huge house in need or major renovation, getting ~$100 a door would require a final selling price at something like 45% of list price.
Something I highly doubt the seller would go for.
Three main questions:
1 - Do my numbers seem somewhat solid below?
2 - Am I missing any other creative opportunities? Being right off downtown, a 4-plex, and a huge/cool old house seem like an exciting deal, but the current situation seems crappy.
3 - Does anyone know the rules concerning kicking those lowly tenants out? (So I can rennovate and charge $500-$700 a month, rather than $350?)
Note: In my calculations below, it is assuming a purchase price of 60k. I doubt the seller would come close to that, though who knows, right?
