Here is the latest Undoor acquisition, details, and analysis!

Deal Highlights

• Buy & Hold Single Family - 1 bed - 1 bath - 484 sqft - MLS listing

• List Price: $35,000

• Purchase Price: $28,457

• ARV: $35,000 - $45,000

• Projected Monthly cash-flow: $348

• Projected Cash on cash: 14%

• Average Market Cash on cash: 2%

Deal Details

View the full analysis here. (Use code UNDOOR when signing up for dealcheck.io to get 20% off!)

Since the beginning of rising interest rates, we have observed the average market yield for our buy-box go from 6% down to 2%. The inventory is still relatively on par with where it was 6 months ago. We are seeing it increase ever so slowly, but for the time being homes in our buy-box still sell relatively quickly and we are mostly competing with owner-occupants.

The reality of a still-competitive market and average yields dropping to 2% prompted us to shift our strategy. We started looking at 1 bed 1 bath single-family home.

We like those because there is less competition. These homes do not typically sell to owner-occupant families. They are often not lendable because their price points are around $50k. They are often seen as “too small” for big investors. The typical tenant demographic is gray-haired single individuals with a pet, who stay for years without causing much trouble.

As soon as we started looking at that type of property, we started seeing more. And an increasing number of those sat on the market for days, weeks, and even longer. So we saw opportunity.

We liked this particular property because it had a new roof. It’s a brick building. It is tenant occupied with a long-term tenant that is paying well below market with a lease renewal in November. The inspection came back clean with mostly new mechanical systems and nothing major to report other than some sewer issues. Doing our due diligence we discovered a city program that will cover the full cost of the sewer repair. No cost to us!

Going back and forth with the seller, we also came to the understanding they were in an older demographic trying to unload their portfolio and this property was the last one they had to dispo. Smells like motivated seller…

This one was added to our portfolio today and July rent is 7 days away :-)

On to the next one.

What We Learned From This Deal

• The market is changing. This is no longer the most aggressive sellers’ market it’s been for the last 2 years.

• There is a city program that will cover the cost of repairing a sewer line up to the house.

• Be more aggressive with motivated sellers.

Detailed Property Analysis

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