multifamily buildings

[Brandon Crumpton]

im looking to buy a triplex. Anyone can give my gain in buying a triplex building? Im wanting to section 8.

[Aaron Montague]

@Brandon Crumpton 

The 50% gives you a rough estimate of how much your monthly costs are going to be.  Search 50% rule here on BP and you'll see hundreds of posts.

Simply $1500 monthly rent = ~$750 in monthly expenses via the 50% rule. Take that 50% and subtract your PITI. If there is a solid number left over, the property is worth investigating.

PITI is Payment(mortgage), Interest (on the mortgage payment), Taxes and Insurance. These are generally bundled together under conventional mortgages, thus their relationship here.

If there is a reasonable amount of money left over after your 50% Rule calculation, you need to dig into the ACTUAL numbers.

I would find out exactly how much the following expense are going to cost you each month. "The tenant pays" is a good answer as well. Put those numbers up here and I'll tell you what I would pay for the place.

Taxes

Sewer and Water

Trash

Heat/Utilities

HOA

Cap Ex and Ops

Insurance

Mgmt Fee - as a % (general consensus here on BP is 10%. include it even if you think you are going to self manage)

Vacancy- as a %. (8% represents 1 vacant month/unit/year)