Rental property CASHflow.......

[Brandon Schlichter]

Hi there, I've posted a few messages in the past, and wanted your opinnion.

I've talked to plenty of landlords in my local marketplace, and it seems that the majority of the landlords have the SAME mindset.

Most landlords I've talked to (I talked to one quite recently that had 20 units or so) and they say that they only hold rental properties for the retirement aspect. IE They want to hold them for 5,10,15,20 years or so , then when they're ready , put money into , and then sell and reap appreciation.

I've never thought of this strategy of rentals, I've always looked at properties as either 1. Rehab properties with high ARVs , or properties good for rentals.

I've also been told that unless I personally maintain all my rentals ,that i'll loose money on a monthly basis rather than make money.

Now , having said that, I want to know if anyone here does that?

I've got 7 rental units between 2 buildings (One a single family home that we will sell this summer when the tennant moves out) and a 6 family building.

I'm also in the process of buying a 4 unit building that can be easily converted to a 7 unit building.

With the 1 unit , we purchased it as a property that could be rented, then refinanced/HELOCed with ease to provide money to buy anything additional. It worked quite well , we were able to take out $9,000 of the property, and the property (Given there are no maintenence expenses) will bring in $75/mo , excluding the money that is paid of on principle which is about $150/month we're paying off with a small extra payment to make it $75/mo income even.

The 6 unit on the other hand is a different monster. Mortgage ammount of $70,000 total over a 15 year commercial loan @ 8.2%.

Expected income from the 6 unit is $3400 per month.
Mortgage payment is $660/mo
Taxes and Insurance are $200/mo

Utilities are paid by us, which are included in the total cost of rental. From previous utility records of prior seller, we're looking at $150/mo for water, $200/mo for Electicity , $200/mo for heating and $50/mo for trash expenses.

This brings me to $1460/month cost, with a potential income of $1940/month.

I've had several repair costs after buying the property due to the fact that the heating system was off for abouct a month (Gas company wouldn't let me put utilities in my name). We also replaced the 50+ year old , 45%-50% furnaces with 80% furnaces to make it more efficient.

Now , looking at my math, Shouldn't I have cashflow on the rental apartment? I've had plenty of people tell me I won't, but even with the expenses i've run into (Furnaces and pipe blowouts) i should do relatively well?

Your Thoughts?