Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Real Estate Deal Analysis & Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 8 years ago,

User Stats

2
Posts
0
Votes
Andrew Marsh
  • Investor
  • Tempe, AZ
0
Votes |
2
Posts

Feedback on this 5 plex deal

Andrew Marsh
  • Investor
  • Tempe, AZ
Posted

Hello all.  I am a new investor that just recently purchased my first 5 plex.  Getting to here has been a 2 year journey - reading, analyzing, contemplating, no action, repeat.  And then I just decided that I will probably learn more from this first deal if I just get on with it :)  So, please, let me know what you think so far.  Warning: it seems to fail a lot of "rules" of thumb.  But I went ahead because my goal was buy and hold with 100/unit/mo longterm and it seems to do that assuming I can manage the transition from current rent to target rent.  Background:  

(5) 2bd/1ba units all about 625 sq feet with laundry hook ups and carports.  Basic units.  I would say C condition in a C area of town.  Market rent for *similar* units would be 550-600.  Currently the gross property rent is 2300 (460 avg/unit).  I think gross property rent could easily be 2850 (570 avg/unit).  A stretch would be 3000 (600 avg/unit).  

I purchased it for 235,000 with 25% down. PITI is 1150. Management is 8%. Water/sewer is 250. Repairs are 8%. I am going to try and take profit "first" and see how that goes. So I will transfer 500/mo into a separate account (my goal was 100/unit/mo). So, 2300 (gross rent) - 500 (owner profit) -1150 (PITI) -184 (management) - 250 (utilities) - 184 (repairs) = 32 (net without vacancy or cap ex). In other words, not much for vacancy or cap ex. So. I bought the property planning on adding value and raising rents. If I can make strategic investments and get rents up to 2850, then the net without vacancy or cap ex would be 582. Vacancy at 5% would be 143 and cap ex at 15% would consume the rest. So. I get my 100/unit/mo and everything is accounted for, right? Please let me now if I am missing anything so far. Also, what would you do differently in my next deal? Other than get it for insanely cheap. I get that. However, if that is it, please say so :)

Loading replies...