@Ronald Perich, thanks for all the input! If you ever have any multifamily properties that don't make sense financial, please pass them my way.
@Tyrell Perry, you already know man!
@Mike Hanneman, I will grab as many as I can! I live 2.5 hours from these properties. I would look for places like this around you. Or you can buy a turn key property from me and I will manage it for you (joking but I wonder if this would work).
@Randall Williams, I would have bought those houses instantly. The only thing I look for when I look at houses I want to buy is the foundation. That's something we can not handle as of right now.
I am always looking for people to talk to about REI. I find myself talking too much and too long about it because of my passion. Send the contact info....
@Dan H., correct me if I am wrong, because I am looking for issues and problems with my investment model. Determining the CAP and maintenance cost would be extremely difficult due to the location that I invest in.
Let me give you an example. One house that is currently being rehab needed a furnace and central air installed in the house along with ductwork ran throughout the entire house. Just a quick Google search told me that it would cost on average to install just the furnace would be $2,370 and to install central air would be $3,000. Lets just say that’s $6,000 to install and I’m say that includes the cost of the unit and labor as well. Now this cost me $1,100 for everything (install and labor).
When investing in small towns like this; it’s a whole other ball game then anywhere else. When I read posts about the cost of labor I almost have a heart attack. Doing labor myself and having family members help lowers the cost greatly and also sourcing products from second hand places and not Lowes and Home Depot.
Lastly, I have had two vacancies since I started. One renter stayed in the house for four months and moved out without notice. The house was rented 6 days later after the carpet was cleaned and other small repairs. The other vacancy that I had lasted for five days because of work that needed to be completed. This was because we had to replace the vinyl flooring in the house and other minor repairs. Deposits were retained do to the termination of the leasing contract. Once I post the house on Facebook there’s at least 100 comments on it....
Honestly man, after I ran the numbers on the first house I bought and they came back so great. I don’t even pay attention to them anymore. My model is if the house is under $5,000 and the foundation is in good shape. Then I would spend no more than another $5,000 on materials and labor. Around two years I would have my investment back.
