Buy the book dude. And expect this property to use up some of your time......
I know this seems like a good idea on paper, with ROI and everything. I will know more when I can actually see the property. The other variable is that the listing says the units are rented, if not than that is a whole nother thing to take into account. We'll see, and Thank you all for your help and advice so far. It is much appreciated because you talk so I can understand you, not like some legal lawyer making my head spin with wacko terms.
We only want to do it, if we can do it right.
Buy the book dude. And expect this property to use up some of your time......
My doctor gave me six months to live, but when I couldn't pay the bill he gave me six months more.
Walter Matthau
Don't try and be anybodys friend or do any favors for your renters. My wife and I have some commercial and residential rental property, anything you do outside of what you have to is wasted time . JMO
"Paddle faster, I hear banjo music"
The above rule is a keeper. When you fix the place up, just make it
presentable, do not go overboard. That way when the tennants tear
it up, there is less to fix, and cost is managable.
I did everything myself, had a helper do the real grunt work. You will
make more $$ this way. When I got over 14 houses/duplexes I hired
a helper full time. This way you can still do your work, and still save
$$ on your rental units.
Documentation.....as many pics with time stamps as possible...before they move in.....then you let them sign a move in inspection.......then when they move out pictures pictures pictures.
"Don't try and be anybodys friend or do any favors for your renters. My wife and I have some commercial and residential rental property, anything you do outside of what you have to is wasted time . JMO"
and relating to the friends thing.....they will try everything from sob stories to getting angry...or threatening to sue. That rule has to be one of the best rules I have heard.
It doesn't hurt so bad when someone destroys an apartment at a complex with 100 or more apartments.....it will ruin you in a hurry with only 4.
Oh and don't expect them to change the filter..lol
There are plusses and minuses to the real estate deal. Can you handle repairs andturnover yourself? if not get a management company. Can you handle collections yourself, what happens when they dont pay? if not get a management company. The obvious advantage is cash flow. on this property it looks good. We dont know the area or renatal potential, will it stay occupied? That being said, if you look at long term, the upside is tax advantages(writeoffs) if you have the income, forced savings if the propery appreciates, growth in many ways both financial and mental, the downside is the tax issues at sale of asset, potential problems with tenants and property, possible loss of sleep due to issues. In general the upside outweighs the downside. There are ways to deal with tax liability later such as a 1031 exchange, but the creation of equity should help you overall.
Turns out only 2 of the 4 units are rented. One unit has been rented for 6 months and the other for only 2 months. Also needs all new heating system (no biggie there) and all new electrical throughout. I still have not gone to look at the property but I did speak with the realtor. Doesn't seem to be such a deal anymore. I also noticed a for rent sign in front of the house that has been there a while, so obviously it hasn't been rented for a bit. What do you guys think of this deal now with the new info...
We only want to do it, if we can do it right.
All real estate markets are generally dependent on local conditions. I would research local conditions 1000% before I ever invested a buck. As I said in my earlier post real estate prices will probably fall another 10-30% in most areas. I can't say for sure but I don't think the Massachusets market is immuned to that kind of fall if not more. Look close, but if it was me there is no way I would buy something now that I'm pretty sure I could by a year from now for a lot less. Not to mention all the headaches that come with being a landlord.
I sold my last investment property last year. It was one of the happiest days of my life. Right now the RE market is awful, just put on any business channel for an hour and thats all you hear. Foreclosures have tripled in a year. If you really want to invest, be patient there will be PLENTY more foreclosures and so called good investments in the future. I think you have at least a year if not more to watch on the sidelines. No need to try and catch the falling knife that is todays RE market. Good luck either way!
go look at it, deduct what it needs to bring up to your standards from asking price and make an offer. worst they can do is say no.....
price they where asking and rent potential you stated make it look very promising.
First, before considering anything else find a good bank, there is no point in researching things about a property that you can't afford or don't want to buy cause of bank terms! Most banks may require a 20% down when purchasing commercial property for investment. I will tell you if your looking to buy,now is the time the rates are droping like never before, I've seen loans go for as low as 5.25% fix .
Second go to the tax collectors office & code enforcement, online/or in person and research a little, look for how many owners has the property had, how frequently has it changed owners.Are there serious code violations that are pending against the property,outdated tax collections. If your driving by the area and see a police officer in patrol of the area,wave him down introduce yourself as a potential buyer of the property. Ask him if they get a lot of calls there, I had one cop tell me on one of my potential buys that they had evictions there all the time bad sign! I even some times have taken walks around the property in the morning speak with the neighbors.
Remember that in todays market real estate is a long term investment I hope this helps a little
WARNING:IF YOU DON'T KNOW THEN DON'T DO, SO THOSE WHO KNOW WHAT YOU DIDN'T KNOW DON'T END UP UNDOING WHAT YOU DID SO IT COULD GET DONE RIGHT!
This is good. Also Acdoc's advice.
Also find out what the vacency rate for the area is. It may be that the earlier owners did not keep up the property so could not get good tenants.
Check with a property managenent co see what they think they could rent the units for.
Then determine What need to be repaired to bring the property up to your standard. Look at existing tenants and what you think you can get from new tenants. Use this to determine you offer.
Old snipes don't die they just loose their steam