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Updated almost 11 years ago on . Most recent reply

User Stats

99
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21
Votes
Thomas Blaine
  • Rental Property Investor
  • Commerce Township, MI
21
Votes |
99
Posts

Thoughts on this 14 unit case study?

Thomas Blaine
  • Rental Property Investor
  • Commerce Township, MI
Posted

Please lend me your thoughts on this 14 Unit I am working on.

They are all 1 bedroom units. Separate Furnaces in each unit. Well Water

Let me know if you have other questions.

Thanks in advance

Most Popular Reply

User Stats

134
Posts
155
Votes
Matt Faircloth
  • Rental Property Investor
  • Trenton, NJ
155
Votes |
134
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Matt Faircloth
  • Rental Property Investor
  • Trenton, NJ
Replied

Hey Tom,

I am a multi family investor also.  I looked over your deal and had some thoughts.

Your overall ROI looks good - you are over 10% in year 1 which is a good start.

1.  I didn't see a line item for capital expenditures - setting money aside each month for things like roof replacements, new furnaces, major renovations, etc...  AKA things you would claim as a capital expense on your taxes and write off over years versus a line item expense in one year.  I typically write in around $400 per unit per year for Cap Ex.

2.  Your maintenance seems like a good number.  Did you plan on having a superintendent in the building, and if so is that included?

3.  I didn't see a leasing commission, unless you are planning on doing that yourself.

4.  The taxes are really low, I am jealous as we are in New Jersey and pay around $4000 per unit here!!  :-)

5.  I think you can get a better interest rate than 5.5% on a 20 year fixed.  We just got 4.18% over 30 years on an 18 unit.  I normally go to small community banks as you can usually meet directly with the decision maker and they have more favorable and negotiable terms.

Those are my thoughts after a brief overview of your numbers, I hope that helps.  Good luck with the deal!!

Matt Faircloth

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