Government employee housing big money.

[William M.]

Ok guys so I went to a school in Oklahoma City for a government job. The first time I was there I spent three months the second time I spent one month. There are hundreds of people who go to this schooling at a time. Each student receives around 39$ a day for housing. This one family owned a small development of duplexes each half house has three bedrooms and two bathrooms and the family will rent each half house to three students. So simple math 39$ a day per student times 3 students is 117 a day and 3,510 a month. Times that by 2 for the entire dwelling $7,020 a month. The houses are fully furnished and they supply some supplies as well as a gym, free golfing at a local gulf club, and frequent parties and BBQs. Please blow some wholes in this business plan because after running some rough numbers I’m trying to evaluate if I can work something like this out. Housing price in OKC is low. I’m thinking when this town was built the houses were in the 170k range and today they would be 210k per dwelling. ( If I’m way off please tell me, OKC is not my market) I think they own 30 houses but for easy math let’s start with 10. That’s 2,100,000$. Each unit makes $7,020 a month and $70,200 for all 10 houses in a month, or 842,400$ a year. Now we know our all in is 2,100,000 and our yearly gross potential is 842,400. Figure in 10% for vacancy’s, 10% for capex, 10% for repairs, 10% contingency. That’s 40% = 336,960 expenses leaving $505,440 as net profit before mortgage. Monthly mortgage estimate is 1,516$ per unit, $15,160 for all ten units each month. and 181,920 a year. That leaves $323,520 as profit. Please blow my idea up. I’m trying to make sense of a current business that has been going for years now and I feel like they are killing it. But maybe you wiser guys than I can bring me back to earth.