Help on bulk house purchase

[Austin S.]

Hello, have my first opportunity to buy 6 properties from an investor.

Bottom Line: 216k for 3350/month in rent.  

I posted the full analysis below and these numbers seem like they would work, my worry is this is a bigger deal for me, i currently have 4 rentals.  A few of the houses are rough and will need roofs over the next few years and some are pretty old as well (built in 1920/1900). None are in good school districts/good areas.

The investor is getting out due to a move. I have purchased 2 of his properties previously and they have cashflowed really well.

Any thoughts?

6 Houses	Date	11/23/2016
Purchase Price	216,000	Loan Am (Yrs)	20
Down Payment $	43,200	Rate %	0.0495
Vacancy %	8%	Monthly Rent	3,350
Repair/Maint %	10%	Rehab Expense	-
Management %	10%	# Of Units	6
Taxes & Ins %	15%
Loan Amount	172,800	Projected 1st Year Income Stmt
Monthly Payment	1,136	Gross Rents	40,200
Cost Per Unit	36,000	Vacancy	(3,216)
Net Rents	36,984
Projected Cash Flow	Taxes & Ins	(6,030)
Gross Rents	40,200	Repairs/Maint	(4,020)
Vacancy	(3,216)	Management	(4,020)
Net Rents	36,984	Interest	(8,554)
Taxes & Ins	(6,030)	Depreciation	(7,855)
Repairs/Maint	(4,020)	Taxable Income	6,506
Management	(4,020)
NOI	22,914	Cap Rate Value
Debt Service	13,628	12%	190,950
Excess(Defict)	9,286	10%	229,140
DSCR	1.68	9%	254,600
ROI	21%	8%	286,425

[Aaron Gordy]

I don't know what the average yields are for properties are in that area. Generally, if the yields are higher than normal it is what is required in order to get an investor to look at it. ROI of 16% seems quite high! What are the typical yields for properties there?

Another thing that stands out to me is that you don't have any expenses related to leasing out vacancies. The cost for leasing a property in Austin Texas is 100% of one months rent. 

Also these houses are old. Its going to be very expensive to maintain. Two, the floorplans in most of these old houses were constructed for a different family type than today.  Today's families requires much more modern conveniences, bigger living spaces, etc. Given that scenario then you will be renting to less than ideal scenarios. Do you have any experience with evictions? What are the costs for evictions? 

Just a few thoughts that come to mind. 

But if you have dealt with this investor before and it was legit then I would proceed but with big time caution, for sure. 

Aaron