All Forum Posts by: Will Stewart

another opinion.... For what it's worth. If it were me, I'd keep the house, I'm a fan of diversification and it seems like in a hot market like SD you shouldn't have a problem getting a nice tenant in there for 2,500-3,000/mo. 

So here's what my actions would be. Spend a few months reading everything on here and inverviewing PMs. Find a bank and lock in a HELOC. Give the 60 days notice that rent is going up to market (use a lawyer). If they stay great. If they leave, take some vacation time and go oversee/work on a cosmetic renno (10-20k), funded by your HELOC. Rent at market rate.

Now you have a wonderful asset producing income and appreciating in a wonderful market (and an excuse for a tax-write off beach vaca a few times a year) AND upwards of $300k on your HELOC to invest locally, or in the stock market, should you choose.

You are in an fantastic position--- take your time and think about what you want to do with your fathers legacy. Keep us posted. 

@Brent Coombs asking is 450k. Estimating ~$40k to get electrical up to code & install new HVAC (currently one thermostat controlling all units).

@Tim W. eliminating the 3br would put the value at like $250k so i want to be realistic. its rent ready, i could have it rented in a matter of days after closing.

So my valuation comes down to this: 64,500 income, 50% expenses (actual adjusted expenses round to this), so 32,250 NOI. 8 CAP is what things go for around here, so $403,000. Subtracting $40k in immediate needs brings us to $363k. Does this seem reasonable?

20% down, 25 year loan at 5% means cash flow of $13k/yr -- about a 15% Cash on Cash.

Have a 6 unit I am looking at in NH. 5 one beds and one 3 bed. Currently only 5 occupied (3br vacant, will rent for about 1600) renting for 3800 total. Taxes 10k, insurance 3k, utilities 7k. I figure 500/mo for capex and maintenance. owner pays all utilities but electric for five units, 3br tenant pays all. Class B area in an A town. Moderate to a lot of deferred maintenance. Once I get it cleaned up should be able to rent units for total of 6700/mo. Assume an 8 cap and 50% expenses that puts the end value at about 500k. Probably needs 50k to get there.

@Axel Ragnarsson that property popped up on my radar too, I didn't have the funds at the moment and then poof it was gone. Nice work moving quickly and getting it under contract. Definitely rare to find a three family in Chester. I wouldn't bank on much appreciation given the location but the cash flow looks great! 

Congrats!

what town? Single fam, duplex, multi?

@Derreck Wells

Good luck looking forward to hearing how it goes. The town hall should have a suggestion for you.

You may end up with only one or two good comps depending on where you are in NH. Some towns just don't have the multi inventory 

@Stephen Bell

I'm up in NH and thought it was impossible too. Then I bought a 900 sq ft 225k single house a quarter mile from the full time fire station with s hydrant right outside. Came in at 800/yr. 

All about variables but yes does seem to be way more expensive up in New England. 

@Matt Crow

What's the price on it? What neighborhood is it in? It won't be easy there will be more issues than "just" a radiator missing. If its cosmetic and you're doing your own work can redo a bathroom for under a thousand (vanity, toilet, tile). Kitchens depending on size and trim level can be 1k or 10k. 5k is safe for my kitchens. But again, I wouldn't plan on it being cosmetic. Walk it with a contractor and get an estimate. Then do it with another. 

Just be careful, some areas are pretty rough. Be sure you know the area and drive by and look at neighboring tenants and such.