Nice 6 Unit Apt. Building Min. Bid $15,000, What To Do?
Looking for advice about this gov’t sealed bid sale. USDA is selling off a 6 unit apt. building, Fed-owned, in central North Dakota. Minimum bid is $15,000, 10% down with bid, balance due in 5 days. Five of six units are rented; one of HUD’s “rent is 30% of income” deals; current rents $211-335 month ($335 is top end of area market rent they say), 3 have current leases, and the HUD rent subsidies end with the sale, though apparently you can apply to extend them. They say it is in “average to above average” condition. Seems like you could expect $16,000+/year rents, main expenses are $6000 for elec. (there’s only one meter), taxes $1600, water $900 per year. Net might be $7000 or $8000 per year. Not bad if I could get it for, say, under $20,000.
This is a town of 625—it’s 40 miles to a bigger town, of 2268 people. It’s a town where you can buy a decent 2BR house on a corner lot for $10,000 (just did an online search), median age is 44, Unemployment rate is 3.1%, median household income is $31,000, median home value is $30,000. It sounds like a typical struggling North Dakota farm town. It’s 250 miles from me, and I’ve never been there but know the genre. The guy at the USDA office sent me more info and the "Standard Sale Contract" (they’re only offering a Quit Claim Deed) said they’ve had a few calls, and he expects some bids.
Here’s the link. If you bid and win, you have to promise to tell me how it worked out. I’d like a little advice about bidding and buying such a place from the gov’t on a QCD, and whether you’d drive this far (I’m just a small investor still), in hopes of plucking a good deal—possibly to flip, but to whom?—or would stay closer to home. Thanks.
http://www.resales.usda.gov/MFH/mfhpropertydetail.cfm?ReqKey=1&property=reo&st=38&cnty=103&prevlistpg=map&showcity=n
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