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Updated about 9 years ago,
Is it realistic to expect $1,000 clean cash flow from 4-unit?
It's somewhat of a "it depends" answer to this question which is why I'm providing more details below, but I would like to know if it is realistic to expect at least $1,000 clean cash flow from a four-unit apartment building in a blue collar area in Lancaster County, PA, particularly Ephrata, Lititz, Denver, or similar area. If that's not realistic, then what is a realistic cash flow number I should be looking at?
4-unit buildings around here cost about $250k.
So here are the details I can provide to narrow down my question and make it more specific:
1. We would do a 20% downpayment which is $50k on a $250k 4-unit building. Mortgage bill will be about $1,100/month.
2. Rents per unit are about $700/month (times 4 = $2,800/month).
3. Taxes are $3,500/year
4. Other expenses (utilities, maintenance, other) I'm not sure about, but some of you who are in the business can fill in the blank to this point.
I can do the math all day long, and it looks good on paper, but I want somebody who is actually doing this in practice who can tell me from personal experience if it is realistic to make $1,000 clean cash flow per month with the above details, and if not, what's a realistic number? Let's assume the rental units are recently remodeled (utilities upgraded) and should therefore be relatively low maintenance. My main priority in this investment is NOT to have a high ROI (but of course I would like it to be as high as possible). I'm more concerned with having steady cash flow with as least amount of headaches as possible (even if that means it will be a smaller cash flow amount) so therefore I'm trying to stay away from city properties. This is why the price on 4-unit buildings is so high along with the taxes in this question of mine since I want to buy it in a nice area with working-class tenants who understand the value of working and acquiring money.
All of your answers and help is much appreciated!