Cincinnati Multifamily Property Analysis

[Kurtis Schreck]

Cincinnati Area Investors - 

Just moved to the Cincinnati area in January - Been driving for dollars, networking at REI events, and watching the MLS to get my first deal in this area, but thought I'd get active on BiggerPockets as well.

A majority of multifamily properties I've looked at have been a decent or good deal. It's concerning. Am I looking at vacancy or costs wrong? Would appreciate any input!

Assumptions in general (case by case, but this is typical)

- Rent $ amounts collected from Rentometer - amount based on interior finishes, potential amenities

- Vacancy at 5-8%, repairs 5%, 10% cap ex, 10% property management  - are these usually higher in C class areas?

- Utilities seem to be split in one way or another from landlord to tenant (somtimes water, sometimes heat, just depends) 

- $50 for lawn service per month, $20 for garbage

- low future assumptions (1% growth for all, 6% at sale)

- Lastly, 4.5% interest on a 20% down payment

- $3000 in closing costs, anywhere from 5000-20000 in initial repairs/upgrades (varies property to property)

Am I crazy? Let me know.

Thank Ya!

Kurtis

[Todd Kalsey]

@Kurtis Schreck a few things on your numbers.  Rentometer is a good start.  I would dig deeper on the comparable rents with zillow, facebook, etc.  Cast a wider net and use multiple sources, just to be sure.

Utilites at times depend on the area, especially water.  Some neighborhoods you'll find it's a standard that landlord pays.  You can always do your own thing, but also best to know what the competition is doing.  Can always go RUBS, flat fee, etc. to recapture your water bill.

Also regarding utilities, focus on what system is in place for your heating and AC with the multi.  Boiler?  Baseboard electric?  Seperate furnaces?   Depending on what's in place will determine if it's hitting your bottom line or if it's the tenant's responsibility.  

If your place is within the city limits, your garbage cost is included in your taxes and isn't a seperate fee.  Small thing, but helps a bit.  If outside city limits, check and see what garbage runs.  For my personal residence out the in burbs, it's about $25 a month.