How much is it worth?
Click here for Top Ten Discussions. CLICK HERE for Q & A Homepage
Receive Free Rental Owner Updates Email:  
MrLandlord Q & A
     
     
How much is it worth? (by rlm [MA]) Feb 17, 2019 10:46 AM
       How much is it worth? (by Hoosier [IN]) Feb 17, 2019 11:02 AM
       How much is it worth? (by JB [OR]) Feb 17, 2019 11:55 AM
       How much is it worth? (by Richard [MI]) Feb 17, 2019 11:57 AM
       How much is it worth? (by Johnny B. [MA]) Feb 17, 2019 12:11 PM
       How much is it worth? (by rentON [PA]) Feb 17, 2019 12:40 PM
       How much is it worth? (by plenty [MO]) Feb 17, 2019 1:18 PM
       How much is it worth? (by fred [CA]) Feb 17, 2019 2:29 PM
       How much is it worth? (by rlm [MA]) Feb 17, 2019 3:51 PM
       How much is it worth? (by S i d [MO]) Feb 17, 2019 4:51 PM
       How much is it worth? (by Steve [MA]) Feb 17, 2019 5:10 PM
       How much is it worth? (by JB [OR]) Feb 17, 2019 5:16 PM
       How much is it worth? (by GKARL [PA]) Feb 17, 2019 9:34 PM
       How much is it worth? (by RentsDue [MA]) Feb 18, 2019 12:06 PM
       How much is it worth? (by rlm [MA]) Feb 18, 2019 12:25 PM
       How much is it worth? (by Steve [MA]) Feb 18, 2019 2:47 PM

Click here to reply to this discussion.
Click Here to send this discussion to a friend

How much is it worth? (by rlm [MA]) Posted on: Feb 17, 2019 10:46 AM
Message:

State Specific Question About: MASSACHUSETTS (MA)

Wondering if anyone could crunch the numbers for me on a property. The price has not been set yet but I want to be able to jump if it's worth it.

4 units (2BR 1 BA each) - current total monthly rent $5400/mon ($64,800/yr)

Tenant pays - gas heat (all units separately metered

Tenant pays - Electric (all units separately metered

Sewer - private septic (new system 2011)

Water - LL pays (est. $100/month)

Taxes - $6,300/yr

Insurance - $3,000 (est. )

In last 5 years (last time sold) - New septic, windows, roof, smoke detectors

Age - built in 1800's

Lead certified

All units are rented and below market. To meet my standards I would remove the wall paneling, drop ceilings, update the kitchen and baths (not sure about the plumb & electrically yet but will update at the same time). --47.14.xx.xxx




How much is it worth? (by Hoosier [IN]) Posted on: Feb 17, 2019 11:02 AM
Message:

Can't help you on the value, but wow the rents and taxes are high in MA! LOL That's good income compared to here, but then your taxes are sky high also.

On a house that old, be sure to have it inspected. Structural issues, plaster condition, electrical, plumbing would all be concerns for me. Roofs are expensive so it's great that was done in 2011...same for windows.

Hope it works out for you. --99.92.xxx.xxx




How much is it worth? (by JB [OR]) Posted on: Feb 17, 2019 11:55 AM
Message:

Those rents and tax numbers sound very close to the Portland area markets. But our water would cost more. And you might have a hard time finding something built in the 1800s.

Around here that building might go for $750k to $1m plus depending on neighborhood and other factors. --24.20.xxx.xxx




How much is it worth? (by Richard [MI]) Posted on: Feb 17, 2019 11:57 AM
Message:

On a place built in the 1800's,I'd figure expenses to be close to 50 percent, maybe a little less.

I'd also want a 10 cap or better. 10 if it's in great condition and you don't have to do anything. If repairs are needed,than a better cap number, maybe a 12 cap. Also, it depends on the area. A, B, C??? The lower the area, the higher cap I'd want.

So, if I'm great condition, 64,800 gross x 50% gives 32,400 and a 10 cap gives $324,000 as a max buy price.

I'd be likely to offer somewhat below that since there would invariably be repairs I would want to do. Plus, I don't want to buy at retail.

So, maybe 250K offer if in good condition in an A or B area.

Otherwise, less.

Don't forget we are near a peak in values right now and history shows prices go up and down. The time to buy is when prices dip. The time to sell is when they are near a peak. --23.121.xx.xxx




How much is it worth? (by Johnny B. [MA]) Posted on: Feb 17, 2019 12:11 PM
Message:

What town? Town plays a big factor. --24.147.xx.xxx




How much is it worth? (by rentON [PA]) Posted on: Feb 17, 2019 12:40 PM
Message:

For whatever it's worth the water estimate of $100 per month for 4 units seems low. There would probably be at least 2 occupants for each 2 bedroom. --67.165.xx.xx




How much is it worth? (by plenty [MO]) Posted on: Feb 17, 2019 1:18 PM
Message:

I would not consider such building on septic. --99.203.xx.xxx




How much is it worth? (by fred [CA]) Posted on: Feb 17, 2019 2:29 PM
Message:

I agree with plenty and Johnny B above.

Have the building inspected before jumping in.

Don't underestimate your upgrades and improvements.

--99.59.x.xxx




How much is it worth? (by rlm [MA]) Posted on: Feb 17, 2019 3:51 PM
Message:

John B - its not on the market but it's inside 495. --47.14.xx.xxx




How much is it worth? (by S i d [MO]) Posted on: Feb 17, 2019 4:51 PM
Message:

This is a subjective question.

I want all of my properties to return all of the capital I have invested in them in 7 years or less, which leads me to the "2% rule." Roughly, that means the unit(s) must rent for at least 2% of the "all in" costs (purchase, closing, rehab, holding). Rent is net of any land lord paid utilities and any "free" labor you plan to donate for rehab, self-management, and self-maintenance.

So, a quick example is if a unit rents for $1000/month my max "all in" is $50,000, and rehab, maintenance, management is hired out.

In your case, I'd subtract $100 water bill (which is dirt cheap for 4 units, btw....verify that bill with the utility company!). The after-utility rent is $5,300/month.

Using my formula: $5,300 / 2% = $265,000.

That's the max I'd pay. --173.20.xxx.xxx




How much is it worth? (by Steve [MA]) Posted on: Feb 17, 2019 5:10 PM
Message:

In my area north of Boston, 3 family building go for $475,000.00 - $700,000.00 depending the city or town. The rents would be in in the $1,500.00 - $1,800.00 range again depending upon the city or town. Building with 4 units & up in the same are sell for less per unit. Mostly this is due to their being considered commercial properties which result in higher taxes, higher property taxes and stricter fire safety requirements. If you are going to be doing all the improvements you mentioned it most likely would be considered a major rehab & trigger updated code compliance including a sprinkler system.

Even though the septic system was redone in 2011, it's still not very new & might not pass Title 5 requirements. It would be important to find out if there are plans to bring municipal sewer to the area.

Also I'm not sure what you mean by "Lead certified". Is that lead free, deleaded or what?

Based on the information given I personally wouldn't consider offering any more than $50,000.00 to $70,000.00 a unit.

--96.237.xx.xx




How much is it worth? (by JB [OR]) Posted on: Feb 17, 2019 5:16 PM
Message:

That's interesting Steve. In my area it is not considered commercial unless it is 5 units or more. Strange... --24.20.xxx.xxx




How much is it worth? (by GKARL [PA]) Posted on: Feb 17, 2019 9:34 PM
Message:

I'm estimating your NOI to be around 44K. In my area that would come in between a 6 to 7 cap or between 635,000 to 750,000. Like someone else said, prices are crazy now and I would buy at those levels. A reasonable price to buy would be a 9-10 cap. --209.122.xx.xxx




How much is it worth? (by RentsDue [MA]) Posted on: Feb 18, 2019 12:06 PM
Message:

My first thought was the code obligations once you open up those walls. The sprinklers are a big one . Seller will have to make it pass Title 5. Sidís 2% rule I makes a lot of sense and I started out with the same 2% rule. The insane costs here shattered that dream and now Iím OK with the 1.5 % rule. --174.199.xx.xx




How much is it worth? (by rlm [MA]) Posted on: Feb 18, 2019 12:25 PM
Message:

Lots of good info. Thank you. I think the asking price will be $425k. I will DEFINiTELY look into the sprinkler system requirements.

Sid - in Massachusetts (my area) a 1,400 sq ft 3BR 1.2ba ranch is selling for $400k, you can't even buy a building lot under $250k

--47.14.xx.xxx




How much is it worth? (by Steve [MA]) Posted on: Feb 18, 2019 2:47 PM
Message:

The last sprinkler system I had done was on a completely gutted 4 unit. It cost $5,300.00 to bring in a new dedicated water line and $6,800.00 for the actual system including piping, back flow valves, sprinkler heads, pressure testing and final inspection by Fire Department. It also cost another $1,200.00 for the stamped drawings.

While they had the trench open for the sprinkler line, I paid another $800.00 to upgrade the domestic water line to 1 1/4" copper. --96.237.xx.xx



Click Here to send this discussion to a friend
Report discussion to Webmaster


Reply:
Subject: RE: How much is it worth?
Your Name:
Your State:

Message:
How much is it worth?
Would you like to be notified via email when somebody replies to this thread?
If so, you must include your valid email address here. Do not add your address more than once per thread/subject. By entering your email address here, you agree to receive notification from Mrlandlord.com every time anyone replies to "this" thread. You will receive response notifications for up to one week following the original post. Your email address will not be visible to readers.
Email Address: