Buying already leased properties.

[Dylan LeBlanc]

Hello.

I am new to real estate investing and have a lot of questions.

The only property that I have right now is the first home that we bought and kept once we upgraded to a bigger house. I ran the numbers on what we paid and what I get for rent and everything is great for that property. Around $187 a month cash flow.

Now I’m trying to get into buy and hold multi family to maximize my monthly cash flow and roi faster.

My question is: an 8 unit property came up for sale and is over priced now (in my opinion). Based off of current tenants rents I would barely break even. It seems they are asking a price based off of market rents (about 1600 dollars more than current rents). Which would potentially put monthly cash flow right around 200 dollars a unit. I am not comfortable offering a price based off of what potential rent is, knowing what rent is current.

The big problem I have is that the three lowest rents are social security assisted living that have been there for 5+ years. They are renting for $575 but where I am 2 bedroom 1 baths are going for no less that $800.

How would I go about raising the rent on a property that I know 3 of the tenants probably can’t afford?

Thanks!

[Mike McCarthy]

Also remember that just because a property is listed for sale at a certain price does not mean that you or someone else can make money off it. You need to do your own analysis and confirm that you can make a reasonable enough amount of money based on what you plan on doing with the property.