Can MF Buy-Hold Investors Make Money in Austin City Limits?

[Danny Webber]

Food for thought! COA Rental Property Exercise

Can buy/hold MF guys still make money in COA City Limits?

I pulled some data from the MLS today. Please share your ideas on how to make these properties profitable.

These are the lowest costs properties in each category that are full rented.

Duplex-Fourplex Investments in COA Currently

As of 10-18-2018 (COA data from MLS only)

Traditional= 25% down purchase investors

There are no 1% rule listed duplexes-triplexes or fourplexes listed with actual rents listed

Cheapest duplex with actual rents listed above 1k per month is 5412 Atascosa which looks like the following on paper:
List price: $249,999
Fin amt@ 75%: $187,499.25
$62,499.75 down pmt + closing costs
PI @ 5.75%: $1094 mos + $414 taxes + $150 ins (assumed) + $111 (6% prop mgt)= $1770 mos (30 yr note)

$1850 rents- $1770 piti= $80 ncf x 12 months= $960 per year
- -$900 Assume 1-month vacancy per year overall (very conservative)
- -$1000 make ready per year (conservative, assuming no flooring/paint etc.)
- - $450 in repair costs per year (conservative, property was built in 1980)

$960 ncf - $900-$1000-$450= (negative) $1390 per year in cash flow on this property as it sits by my calculations

How do you make money on this without?
- Buying your cash flow through larger down pmt
- Hoping the market appreciates enough by the time you sell to offset seller fees

4 PLEX EXERCISE

11612 April Dr
$425,000 sales price
$3015 in total rents (all 4 units rented)

The math:
$106,250 down pmt + closing costs
$318,750 financed @ 5.75%= $1860 PI (30 yr note)

$1860 PI + $755.25 taxes + $225 ins (assumed) + $180 (6% PM)= $3020 per month in costs

$3015 rents
-$3020 costs
-$5 per month ncf x 12= Negative $60 ncf per year before VACANCIES, REPAIRS, MAKE READIES
I am assuming you would be upside down at least 3k per year on this one as it sits conservatively.
(excuse grammar-math should be correct, if not please let me know)

How do we make these profitable?