Thanks Nathan and Joel!
Yes we found local general contactors (a self contained team of electricians, plumbers, flooring & drywall guys) willing to do each unit for $3000 + we budgeted $1000 for appliances. They are desperate for business and eager.
My ARV was not right, I believe it is $4.2 at a cap rate of ~10%, and yes ideally this should be good enough for many investors to show interest in this project, but the issue is that we (the partners) do not have any past experience accessing the right channel of investors, not do we know how/ where to go about getting the right investors.
Our plan was to rehab 3 blocks (total 18 blocks) of ~8 units each in Nov/Dec, rent out in Jan and with the income start rehabing the others. All rehabs to be completed in ~1 year. Though this might sound aggressive, our belief is that this is possible since this property was 30% occupied 5 months earlier and 90% a year ago. Since the owner defaulted the bank assigned property mgmt company was only focused on sustaining the property during the foreclosure period, therefore leading to further deterioration.
Joel, no new permits for new buildings have been awarded per our knowledge. In fact new businesses are starting in the neighborhood. We are now exploring the state multifamily bond program, and also local banks with rehab loans as alternatives.
