Quaint little fixer upper

[davewindsor]

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Everything else is calculated risk,where was the city at 5-10 years ago and where will it be 5-10 years from now,if you stick 335,000 into it can you buy simular elsewhere in the city?

Make 20% of the units below medium market rate and HUD steps in with partial funding,now you are down to less then $150k out of pocket.
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You're gonna need spend a lot more than $335K to make the Laredo rentable.

[Richard]

You're gonna need spend a lot more than $335K to make the Laredo rentable.

Depends on your target market,I do not think you will be able to command $2500 a month rent in that neighborhood at this time,so if your target is $800 per month you are going to do accordingly.

So between that goal and actually looking at it and running the numbers who’s to say what one needs to spend.

Biggest cost per unit would be the kitchen and bathroom and you are not creating a spa or gourmet kitchen,in that price range one is looking for clean and neat without critters running around.

[davewindsor]

Depends on your target market,I do not think you will be able to command $2500 a month rent in that neighborhood at this time,so if your target is $800 per month you are going to do accordingly.

So between that goal and actually looking at it and running the numbers who’s to say what one needs to spend.

Biggest cost per unit would be the kitchen and bathroom and you are not creating a spa or gourmet kitchen,in that price range one is looking for clean and neat without critters running around.

And how much is a new elevator with all the safety devices that an insurance would be willing to insure going to cost? The building dept is not going give a 4 storey building an occupancy permit without an elevator--in Ontario, anything over 3 stories requires an elevator and I'm sure it's the same in Michigan. The windows are all broken glass/missing and it's been exposed to the elements for years, so it's a complete gut. Those buildings are usually wood framed which will be seriously warped from all the rain and snow getting in, so the building dept is going to make you replace a lot of the joists and put in new plyboard floors in an era where lumber has gone up 300% in the past few years. The ESA is going to require all new wiring with a plug on each wall when you start applying for permits. The Laredo would run well over a million in rehab costs easy for simple units. Plus ,once your adjacent neighbors realize what you're doing, they'll jack up the prices of adjacent lots for your parking lot. I remember talking to a rehabber in Palmer Park that rehabbed something that looked very similar to the Laredo and he spent millions on it and that was a decade ago. Luckily, he got all the grants and was in the NEZ zone. The building dept even required him to put in a sprinkler system on each floor and into all the apartments which requires a much larger water main.

Not saying it isn't worth it. A building like that in average condition, but still up to code, fully rented would sell for $2.2m USD in downtown Windsor easy, so a fully renovated one in Detroit would probably have that kind of value too in this crazy real estate market. But any lender including the land bank is going to want to see serious skin in the game like 50% down.