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First Time Real Estate Investors
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I bought my first Property, what should I do next?
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Rank: Copper
Joined: 5/17/2007
Posts: 2
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Hi, I got my first property by accident. It's a duplix in the Cleveland Downtown Area. The property is paid for under my mother's name. Both units are in un-rentable condition because several things need some touch up.
There are roughly 350 out of pocket since I have to pay for all the bills (Property Tax, Insurance and utilities). I can't sell the property just yet because the market is so low that I would lose quite a bit and I don't want to just keep paying for all these bills till the market comes back.
Rehab including Water Pipe, Sewer, Furnance, Water Heater and several small things like new doors and paint. Some appliances like refrigrator and stove also needed. The estimate cost for rehab about 15K-18K.
Rent rate is 300-400 for down unit and 200-250 for upper unit in the local market. What should I do next? Should I invest another 15K to get it back to condition so I can rent it or just sell the property?
Any Advise would be helpful, thank you.
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Rank: Copper
Joined: 12/27/2008
Posts: 4
Location: NE
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If you have the money to spend then you can but it will take for ever to get your moeny back with only $650 rent and $350 out of pocket exspenses. That leaves you with 300 cashflow to pay for a rehab loan or just paying your self back. Not to mention if a tenant moves out. but if you can handle that from time to time then it could be an OK investment if your not paying your mother for it.
During these time your going to sit on it anyway so why not get the down unit don so repairs should be cheaper and your bills are taken care of unless you don't have the money to fix it then do both and get it rented.
Keep me informed
Looking to get out of the rat race without using my money
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Rank: Copper
Joined: 5/17/2007
Posts: 2
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Thank you for your advise.
Well, both units are facing the biggest problem, which is the water sewer pipes. Due to the bad architecture design. Both kitchens are far away from the small basement and all the pipes are hidden, very hard to access and repair.
Also, because winter is coming, not so many people want to move. My other concern is that water pipe will burst during winter time due to vacancy. Don't want to heat the house since I'm paying so much for bills already.
I don't have to pay my mother beside the bills. Should I wait till next year to get it done? or does it worth the investment now? Thank you.
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Rank: Rhodium
Joined: 8/23/2003
Posts: 1,848
Location: USA
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DMD wrote:Thank you for your advise.
Well, both units are facing the biggest problem, which is the water sewer pipes. Due to the bad architecture design. Both kitchens are far away from the small basement and all the pipes are hidden, very hard to access and repair.
Also, because winter is coming, not so many people want to move. My other concern is that water pipe will burst during winter time due to vacancy. Don't want to heat the house since I'm paying so much for bills already.
I don't have to pay my mother beside the bills. Should I wait till next year to get it done? or does it worth the investment now? Thank you. It is challenging to give you solutions as it depends on your financial picture. If you could sell the property now at a loss but write it off then why not? Let someone else take care of it? You didn't give the #s such as: fair market value, cost of operating the property such as property management and vacancy, if you fix up what kind of renters will you have?, what about your taxes this year?, can you invest that $15K in another area that gives it better return?, etc... The unfortunate thing is that most investors are not sophisticated enough to see the options due to being taught only one way of doing things. The underlying guideline is what is the best use of my time and money to get to my financial goals. So what are you looking to do? Can you hold the property until spring and sell it higher but not that much cause the market may still be severely depressed? Can you sell it now for a tax write off? If you repair it, can you sell for a good gain? Afterall if you put $15K and get back $15K then that is a loss in my book cause I want to make alot more money with the least risk. Capiche?
Asianwolf2001 My Blog of Abundant Success abundantsuccess.blogspot WOWCASHFLOW GROUP - NYC At Facebook
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