I haven't been too good about seeking advice in the past and have made a lot of decisions based on my gut feel and info I get from BP, but on this one I am really conflicted. So I could use some help.
I have had a duplex (16 yrs - house hack) and single (1 yr - BRRR) in north Pottstown, PA 19464. I know there are many BPers who don't like to invest in this area, but I am happy with the performance despite the borough red tape.
I found 4 row homes (same block, same layout) in the same town (a few blocks north of the 'war zone'), they were purchased super cheap by the current owner and renovated around 3 yrs ago, 3 of the 4 currently have tenants @1200/mo. The plan was to purchase in December, refi in June, payback $140k in personal loans, take the cash and look into some bigger opportunities.
Before I get ahead of myself, here are the numbers:
| Property |
| 340 Oak |
| Acquision |
|
| $44,000.00 |
|
| Expense |
|
| Debt Service |
$0.00 |
| RE Taxes |
$2,636.00 |
| H2O |
$0.00 |
| PM 8% |
$1,152.00 |
| Ins |
$1,200.00 |
| cap ex 5% |
$720.00 |
| Operating
Expenses |
$5,708.00 |
| Annual Income
(Proposed) |
$14,400.00 |
| NOI |
$8,692.00 |
| monthly
Net (Proposed) |
$724.33 |
| Property |
| 338 Oak |
| Acquision |
|
| $44,000.00 |
|
| Expense |
|
| Debt Service |
$0.00 |
| RE Taxes |
$2,741.00 |
| H2O |
$0.00 |
| PM 10% |
$1,440.00 |
| Ins |
$1,080.00 |
| cap ex 5% |
$720.00 |
| Operating
Expenses |
$5,981.00 |
| Annual Income
(Proposed) |
$14,400.00 |
| NOI |
$8,419.00 |
| monthly
Net (Proposed) |
$701.58 |
| Property |
| 334 Oak |
| Acquision |
|
| $44,000.00 |
|
| Expense |
|
| Debt Service |
$0.00 |
| RE Taxes |
$4,078.00 |
| H2O |
$0.00 |
| PM 8% |
$1,152.00 |
| Ins |
$1,080.00 |
| cap ex 5% |
$720.00 |
| Operating
Expenses |
$7,030.00 |
| Annual Income
(Proposed) |
$14,400.00 |
| NOI |
$7,370.00 |
| monthly
Net (Proposed) |
$614.17 |
The owner was looking to sell all 4 as a package for 200k (50k each). I was able to see the vacant unit and it looked like the quality of the reno was pretty good. Because I didn't have enough cash for the whole enchilada, I made an offer of 38k each for 3 - we haggled and settled on 44k each.
I finally got into the occupied units yesterday and while the condition is not terrible, they will definitely need some love if I want to get as much refi $ as possible. E-praisal values would have me net @221k, so after I pay back my loans I would have @81k to work with.
There is another deal though that has caught my eye - portfolio of 18 sf properties that after all expenses would net @9800/mo - currently all are rented. I of course like this cashflow better, BUT . . . . my cash would go into a down payment. I am not sure how to value the portfolio to estimate what I could get if I were to refi. I want to go for the 'big fish', but want to make sure my BRRR machine can continue run and my portfolio can grow.
Any advice is welcome (please be gentle).
