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Updated almost 6 years ago,

User Stats

64
Posts
11
Votes
Corwin Hernandez
  • York, PA
11
Votes |
64
Posts

Would this cash flow well?

Corwin Hernandez
  • York, PA
Posted

I have a friend who is interested in real estate investing and currently looking at different properties in the Dove Pennsylvania area. He is currently renting and wants his landlord wants to sell. His landlord bought at the height of the market in 07' and wants $120k for the single family, 3 bed, 2 bathroom house. It needs an updated kitchen and some repairs. The average fixed up home in the market is selling for around that $120k mark or just above. My friends concern is that the asking the price doesn't justify the home because of the numbers. After the mortgage, cap ex, maintenance, planning for vacancy, and property management, all factors we've been using when running numbers on a property based off the information gathered here on BP, it would only cash flow $26 a month at a purchase price of $100k. However, the garage is rented out for $225 a month. It is a 2 car garage and it's current use is fixing vehicles. After that, it cash flows over $200. However, my friend's concern is if the garage being stops, could he rent it for just as much? What is the typical amount a garage is rented for? Would it be a good deal if it doesn't cashflow without the garage? Also, is there anyway to deal with a seller who has bought at the height of the market and is trying not to budge on the price too much?

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