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Updated almost 10 years ago,

User Stats

67
Posts
7
Votes
Nick Horob
  • Investor
  • Fargo, ND
7
Votes |
67
Posts

Signed up my first deal!

Nick Horob
  • Investor
  • Fargo, ND
Posted

I completed a direct mailing to small MF owners in Fargo, ND.  I sent 400 letters, received 25 calls, and found 5 "hot" leads.

I signed a purchase agreement on Friday to buy two 4-plexes for $330k.  Not quite the 10% cap rate I was targeting but close.

They are all 2 bd, 1 bath units fully rented for $500/mo.  Landlord pays heat which averages $100/building/month.  $200ish from Nov-March.  

Borrowing $235k @ 4.5% and 20-year amort. $100k downpayment.

The rents are approximately $50 below market so I'll be looking to adjust those as leases expire.  If I can get the units to $550, the cash-on-cash will be 15%

Here are the initial numbers.  Just wanted to share!

Gross Rent $ 48,000.00
Less: Vacancy $ 2,400.00 5%
Less: Taxes $ 4,800.00  
Less: Ins $ 2,600.00  
Less: Utilities $ 2,400.00  
Less: Mgmt $ 3,192.00 7%
NOI $ 32,608.00  
Cap Rate 9.881%  
 
Less: P&I $ 15,600.00  
Less: Capex $ 6,000.00  
                       
Net Cash Flow $ 11,008.00

11.0%

I have a $60k offer in on a tri-plex that needs approx $10-15k of work.  Even if we can settle on $70k, that deal should be 12% cap rate and 16-17% cash-on-cash.

Not home run numbers but they fit my plan.  Best of luck to the rest of you!

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