WON'T CASH FLOW, is it the taxes?

[Account Closed]

Greetings BP,

I have been trying to break out into the world of multifamily REI. However, there is not a single property in my area or the surrounding areas that will cash flow even close to $100/door. I am under contract for a duplex currently but the only way I could get it to cash flow at $100/door was to do a cash purchase.

This property was the closest by far to getting $100/door then the other 60 or more properties I have analysed. Below is the break down on the numbers.

Purchase price: $46k

Scheduled Rents: $1300/month ($650 each unit)

Expenses are

Garbage: $60/mo (approx)

Lawn/Snow Removal: $60/mo (approx)

Water/Sewer: $60/mo (approx)

Insurance: $58/mo

Property Taxes: $283.33/mo (ouch, I think this is the reason for not making cash flow)

Vacancy: $130/mo (10%)

Capex: $130/mo (10%)

Management: $130/mo (10%)

Repairs: $65/mo (10%)

Cash Flow w/ Mortgage (25% down, 20yrs at 6%) = $76.50/mo ($38.25/Door)

Cash Flow w/o Mortgage = $323.67 ($161.84/Door)

What am I doing wrong? Or is it all due to the property taxes?

Any and all insight is very much appreciated

Thank you,

Jason

[Michael Wagner]

@Account Closed

If you have the time, it is advisable to self manage your first property....otherwise it is hard to really know "what to pay a property management company to do".  Im a big proponent of hiring it out but only after you have mastered the day to day yourself so that you intimately know what is going into the management.

Where is Upstate NY are you?