All Forum Posts by: Ryan Tierney

@Ryan Breen appreciate the response! Yeah as im looking into it more the rehab cost is going up for sure. Unfortunately it doesn't make much sense without the third unit at that price long term but I may try to get creative. Im at the point where I want to buy a property but dont want to be too lenient on my criteria just to make it work.

Hello all, 

Here is a property I have been going back and forth on if I want to offer on. I am a new investor looking for a buy and hold multifamily purchased with an FHA loan that I will owner occupy and manage  until I can find another in order to start to scale. I am looking for at least 10% coc and at least $100 cashflow per door. 

This is in Holyoke MA. 2 unit top/bottom with 3 beds 1 bath in ea. all updated and move in ready. Newer mechanicals (2 yrs) and both units seperately metered. 2 sets of Laundry units in basement in seperate room. 

The kicker! The basement is finished and would make a great studio/1bedroom. It has a finished bathroom but no kitchen and no heat but two points of egress. I would need to put in a seperate electric panel for the third unit as well as HW heater, electric baseboard heaters, kitchen, and anything else to bring it up to code. 

The property is zoned as a 2 family but would not need to be re-zoned, would just need architect plans drawn up and submitted to the city in order to have legal third unit.

Exterior needs new siding, front is brick but rest is wood shingles, would replace with vinyl. 

My concerns are that Holyoke is not the best city, not very good schools and high crime in the downtown area. This property is not in that area and looking through the police reports shows little to no crime in the neighborhood and no violent crimes. Would be very diligent in my screening process. 

Analyzed as if I was moved out and getting income from all 3 units

Numbers:
Price: $340,000
Beds: 7
Bath: 3 
Size: 2790

Loan: FHA, 30 yr, 
DP: 3.5%  (11,900)
I: 2.6%

Rehab: 
$20,000 ( siding, electric baseboards, HW heater, Sink, Stove, Fridge, Cabinets/counters)
Not terribly familiar with rehab costs and cant get free quotes cause I don't own... 

Income: 
Unit 1: $1300
Unit 2: $1300
Unit 3: $900

Expenses: Monthly
P+I: $1313
Taxes: $389
Ins: $327
Owner Utilities: $105
Repairs: $245
Vacancy: $175
Management: $350
Capex: $175

NOI: $20,802
CoC ROI: 12%
CashFlow: $420/ month

You all rock and I thank you in advance for any comments! 
If you are local feel free to reach out and we can chat about REI

Ryan, Just finding this now. I am a new investor in the Western MA area and am looking at multiple areas including Holyoke for a residential multifam to house hack as an initial investment property and keep as a rental down the road. I have done a lot of research and a lot of reading/educating about REI in order to be prepared but am at the point of needing to learn the rest by doing.

From what I have learned, Holyoke is an interesting location that has some blemishes for sure. I have heard there is a great sense of pride in Holyoke if you can find a good location. However, there is a general stigma of it being a trash pit. I personally have narrowed down my acceptable area to about 1/3 of the area of Holyoke. Everywhere outside of that I cant justify the risk of crime, low-quality tenants ect... Even in this third the schools are very low quality, but the crime is pretty low compared to the downtown area. 

I am even weary about the 1/3 that I am looking at due to not knowing the exact tenant population/demographic in terms of quality and occupation as well as the schools not being good. 

The last thing I need is for my first deal to be a big loss. 

If you ever want to reach out and have any more conversations about the area and share experiences I would love to connect. 

Kind Regards,

RT

What are your thoughts on rentdata.org?

@Ryan Hebert - Can you still utilize the BRRRR Strategy with House Hacking?