Rental Property Investor · Dubuque, IA · Member since 2014 · 41 posts · 4 votes
11y
What kind of percentages do you look for as far as cash on cash return, dollar amount of cash flow, etc. Is break even after all expenses and allowances enough (not including paydown or appreciation)?
Rental Property Investor · Dubuque, IA · Member since 2014 · 41 posts · 4 votes
11y
@Ben Leybovich always enjoy your contributions to the site. The podcast was great also. What if rent was somewhere in the $1600 range? I think I could get it here pretty easy.
By the way, how do I get this dang mention thing to work?
IF it works the member you're @-mentioning will pop up under the edit box. But it doesn't work on every setup. For me it works on windows and Mac but not my android tablet.
Investor · Fort Collins, CO · Member since 2014 · 4 posts · 0 votes
11y
In my area, I can only dream of a deal like this. I'm looking for more properties now, and to generate a rent of $1400 or more, I'm looking at $200k properties at a minimum. Although taxes here are about half as they are in your area, it's still a no-brainer deal for me, unless there is some kind of red flag regarding the property itself.
Cash on cash is 325x12 = 3900 / 13000 = 30% Cash on Cash
- I didn't calculate the balloon
- What am I missing here? +325 per month and 30% cash on cash looks good to me.
I'm newer here so someone double check me but it looks like a slam dunk deal.
This post is right on. I would buy this up in a second. However, make sure you don't overlook capital expenditures. If you need a new roof asap, this could kill your cash flow for a while. Be sure to look into the larger ticket items and budget 5-10% for capital expenditures. Other than that, looks good. Nice find.
Rental Property Investor · Dubuque, IA · Member since 2014 · 41 posts · 4 votes
11y
Thanks for the responses guys. It has a new roof and one side is pretty much fixed up. Side two needs some work, but the renters have been there for 20 years and don't sound like they are going anywhere. I see all this talk about 2% rule being the goal, but I don't think that is possible here. I am sure I could do better as far as numbers go, but then I would probably be investing in an area I wouldn't want to be. I figured 10% for management also which brought my cash on cash figure to 18.21%. Didn't think that was too bad. Sure would be nice to get the 2% rule to work. Wouldn't take long to be diving in the piles of cash like Scrooge McDuck, Cap rate is only 7.28%. What do you think is a decent number? I would especially like to hear from people in my area. Maybe I will have to start looking a little further outside my area.
I am in the same boat as Rick deals like that don't come around like that in my area. If your numbers are correct. It looks like a great deal but as someone mentioned earlier if you have a big ticket item(A/C, Roof, Water heater, etc) nearing the end of its life you need to account for that. Also you may adjust your Vacancy and Maint depending on the property and location if you have and "A" Property you should be ok with the 8% and 10% if you property is older a B or C property I would push both of those up. Also a bad area or and area that might caused more maint needs attention, you mentioned snow. Where I live I use 10% for maint and its 60 to 70 degrees all year round and rains maybe 5 days out of the year. Also I would verify all your numbers from multiple sources especially the rate you can rent it for. If it still makes sense go for it.
Rental Property Investor · Dubuque, IA · Member since 2014 · 41 posts · 4 votes
11y
This is probably a low B unit on the good side of town. Everyone wants to be in this location. The building is 1960's ranch with garages and separate laundries in basement. No major items are near end of life expectancy. The rents according to my realtor could be up to $900 per side once the unrehabbed side gets a little attention.
Not talking major gut job, just flooring, paint, and maybe shower. Tenants do snow removal and mowing. Newer 3 bedroom apartment units less than 5 years old are going for $1200-$1500. A 3 bed SFR about the same age goes for $900-$1400.
@Michael Noto what do you think I should be shooting for as far as cash flow? What kind of cash flow would make you jump at this place?
I've heard people say on this site that they are looking at +200 per month in cash flow on duplex's. In all honesty, go on to the next step with this one.
Rental Property Investor · Dubuque, IA · Member since 2014 · 41 posts · 4 votes
11y
Thanks for all the feedback everyone. I think I am going to go for it. It may not be spectacular but it looks pretty solid. I will try for my home run next