Episode 26: Deal or No Deal?

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Deal or No Deal?

In this episode I pull three investment properties off my local MLS service and I talk about them.  I analyze the numbers, look at the neighborhoods and I tell you which one I like the best and why.  The point of this exercise is so you can do the same.  These are three properties that are currently listed for sale and I randomly chose them.  I wanted to see if I could figure out which would be a better deal.

Property #1:  1412 E Lemon Street, Lakeland, Florida.  MLS # L4700530

1412 East Lemon StreetThis is the first property that I looked at.  This property is listed as a 3/2 with a workshop and is offered for $55,000 and is currently rented at $750.00 per month.

Listing:

This is a copy of the current listing for this property.  I have included both a Jpg (image) and a pdf version of this information.

1412 East Lemon Street - Listing1412 East Lemon Street – Listing

lemon street – PDF

According to zillow.com this property last sold in February 2014 for $22,500.  It appears from the listing that this house is being ‘flipped’ which mean that all the systems of the house are most likely in great shape.  I would guess that the seller got a great deal on this place.  Also, since they have already lowered the price once, you’d have some room to get the price down a bit.

Analysis:

LEMON numbers – PDF Version

Here are the numbers that I am using to look at the property.  I have included a pdf (above) you can download and jpg (image) versions below that you can download.  Is this property a deal?  This property looks like a good deal.

1412 Lemon street page 21412 Lemon street page 1

Here are the numbers that I am looking at for the Lemon Street property.  This just give you a basic idea of closing costs and maintenance fee and the long-term projected income.

Although the listing says that this property has a cap rate of 18%, I believe that to be a bit high, either way, his property still appears to be a strong performer over the long term.  Also, the price of this property seems reasonable with the zillow.com estimate and reportedly, there has been a lot of updates.

Property #2:  814 East New York Avenue, Lakeland MLS #T2605288

814 N new york ave

Listing – Pdf version – New York Listing – PDF

new york listing jpg This property is listed as 3 buildings in which each one is a 2 bedroom and one bath unit. They are rented at $467.00 each.  This property has good cash flow.

This property does not appear pleasing from the photograph in the listing.  Also, its been on the market for 267 days.  That’s a red flag for me.

Analysis:  get the PDF version here  New York Property Analysis

New York Analysis Page 1

New York Analysis Page 2

Here are the numbers for the New York Avenue property.  These are the estimated closing costs and long term expenses and income.  Although I estimated the capital expenditures (A/C, roof, ect) as the same as the other properties.  I suspect that this property will actually require a lot more repaired and expenses nearly upfront to bring this property to a  basic level.  I also suspect that this property is not a great deal and is overpriced based on the estimate value from zillow.com, the extended days on market and the sale price from two years ago.

Property #3: 419 West Belmar Street, Lakeland Fl, MLS #L4701678

419 e belmar streetThis is the google street view of this property.

 

 

 

The Listing:  Get the PDF Here: Belmar – Listing PDF

Belmar listing JPGHere is the listing from the MLS service for this Belmar property. They are asking $114,000 so it more expensive than the others.  Its listed as two units the house, and an efficiency unit.  I would double check this information.  This property is in a great neighborhood.

Analysis:  Get the PDF version here : Belmar analysis

Screen shot 2014-09-07 at 10.25.47 AM Belmar Page 1This property has great curb appeal and is in a great neighborhood and is centrally located near downtown and the local colleges.  According to zillow.com this property has a estimate value of $96,000 and last sold in October 2012 for $50,500.  So the owner is trying to double his money in two years.  Now I’m going to assume that he has made some improvements, but I think this property is overpriced.  That being said I also think that if you could get a significant reduction in the price this would be a great property to hold as a long term rental.

Conclusion:

So you have seen all the numbers that I have.  I have tried to explain the numbers to you and I have linked to them so you can download and review them for yourself.  I have not set foot on any of these properties.  I have only used the tools that I have provided or are online.  So here is my opinion about which property is the best “deal”.

I would be most interested in the 1412 East Lemon Street property.  Although all three appear to be owned by investors, this one seems to have been completely rehabbed and the price is in line with the neighborhood and its a great rental area.  Also, according to rentometer.com you may be able to raise the rent a bit and increase your cash flow.  I think the New York property is a headache waiting for a new owner, I also am not fond of the neighborhood and suspect that the property has a lot of differed maintenance.  The Belmar street property I think is over priced and although its in a great neighborhood it only gets slightly more rent and is double the price of the lemon street house.

These are my thoughts.. Let me know yours.  gavin@theREloop.com

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