Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Multi-Family and Apartment Investing
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 13 years ago,

User Stats

6
Posts
0
Votes
Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
0
Votes |
6
Posts

Is there a rule of thumb on how much to net per unit?

Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
Posted

I currently own a 4plex in central WA state and a SFR in Michigan. I am looking into some larger residential properties in the area. My question is: Is there a good rule of thumb you use when researching potential properties on how much net profit you will make per unit? I understand it could be different for each investor, but I am curious about what some other investors think. Thanks in advance.

User Stats

8,794
Posts
4,382
Votes
Bryan Hancock#4 Off Topic Contributor
  • Investor
  • Round Rock, TX
4,382
Votes |
8,794
Posts
Bryan Hancock#4 Off Topic Contributor
  • Investor
  • Round Rock, TX
Replied

Most folks aim for $100/door/month.

User Stats

6
Posts
0
Votes
Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
0
Votes |
6
Posts
Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
Replied

so 230 is right on then :-)

RentRedi logo
RentRedi
|
Sponsored
RentRedi: Your All-in-One Property Management Solution—FREE RentRedi offers 2-day funding and 24/7 live chat. It’s in your BiggerPockets PRO membership for free

User Stats

25
Posts
1
Votes
Replied

If i have no skin in the game, then i am glad with any return as long as i have very good cushion to pay all expenses.

How is Michigan, by the way? I keep getting deals with unbelievable numbers. The state keeps losing people i heard!

User Stats

6
Posts
0
Votes
Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
0
Votes |
6
Posts
Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
Replied

i have nothing but problems with the Michigan property. i do not suggest it unless you have very good management and a willing to gamble .

User Stats

6
Posts
0
Votes
Hardik Patel
  • San Francisco, CA
0
Votes |
6
Posts
Hardik Patel
  • San Francisco, CA
Replied
Originally posted by Bryan Hancock:
Most folks aim for $100/door/month.

shouldn't it be based on price/unit? isn't % more relevant as far as return is concerned as unit price cost different for different types of unit and in different part of countries?

User Stats

140
Posts
88
Votes
Keith Barton
  • Real Estate Attorney
  • Cleveland, OH
88
Votes |
140
Posts
Keith Barton
  • Real Estate Attorney
  • Cleveland, OH
Replied

Any positive number is a good start.

Any amount more specific (or even ballpark) really depends on 1) your comfort level,
2) your goals,
3) the accuracy of your expense budgeting; and,
4) the accuracy and consistency of your budgeting for repairs, improvements, emergencies, & vacancies, etc....

If all you ever buy are properties with positive cash flow from day 1, you determine your income by the number of those properties you buy.

Have negative cash flow properties? That's OK, just make up for it in volume.... ;)

User Stats

6
Posts
0
Votes
Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
0
Votes |
6
Posts
Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
Replied

Keith , thats kind of how i see it . the price per unit is around 45k and with what i think is pretty close estimations on the budget puts me around 230 per door net.

User Stats

5,700
Posts
3,497
Votes
Rich Weese#2 Off Topic Contributor
  • Real Estate Investor
  • the villages, FL
3,497
Votes |
5,700
Posts
Rich Weese#2 Off Topic Contributor
  • Real Estate Investor
  • the villages, FL
Replied

Your net will change significantly based on % financed. Are you talking zero down or no mortgage? I don't get anywhere NEAR $230 per door on 154 units in Dallas, but I'm extremely happy with only TWO vacancies. Rich

User Stats

6
Posts
0
Votes
Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
0
Votes |
6
Posts
Michael Kohlhoff
  • Real Estate Investor
  • Pasco, WA
Replied

no this would be with a 90%LTV and assuming a 5% vacancy along with the other associated expenses.

User Stats

22,059
Posts
14,125
Votes
Jon Holdman
  • Rental Property Investor
  • Mercer Island, WA
14,125
Votes |
22,059
Posts
Jon Holdman
  • Rental Property Investor
  • Mercer Island, WA
ModeratorReplied
Originally posted by hardik patel:
Originally posted by Bryan Hancock:
Most folks aim for $100/door/month.

shouldn't it be based on price/unit? isn't % more relevant as far as return is concerned as unit price cost different for different types of unit and in different part of countries?

Maybe. Maybe not. A tenant is a tenant and requires about the same amount of effort whether the rent is $500 or $1500.

Its also much easier to extract $100 in true cash flow out of $1500 in rent than it is to get that same $100 out of $500 in rent.

Keep in mind that $100 assumes 100% financing. If you have a down payment into the deal, you want more cash out. Otherwise your money is working for little or nothing. If you pay cash, for example, you should expect to get considerably more than $100, unless you're buying very cheap properties.