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Updated about 8 years ago,
5 Plex purchase analysis -- First time buyer with questions
I'm purchasing a 5-plex in Montana. I do not live in the town and a value add for me is a handyman childhood friend is willing to managing property for 10% of rents. Plus the most successful realtor in the town is also a friend, so I feel safe about all information they are providing.
Property Info:
5 total units: 4 - 2BD/1BR's and 1 - Owner's unit 1BD/1BR w/ a loft and garage. Total rents currently bring in $2900/Month. Laundry brings in another $100. All units have separate meters -- Tenants pay water, electric, ect.
Loan Info:
Owner is carrying note for $285,000 and I'm putting 50K down. 15 year loan @ 4.35% -- W/Tax, ins, ect -- my payment is @ $2150/MO.
The 2 BD/1BR's rent for $600 for upper and $500 for lower (although they are the exact same layouts). I have been told by a realtor/family friend that I can safely get $650-700/MO for all units.
The tenants are all long term and there is no rent control in the Montana. Do I risk risk losing them and raising the rents? Or keep things status quo?
Also, is the interest rate fair? And am I missing anything in this investment?
Thanks in advance for your input!