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Updated almost 7 years ago on . Most recent reply

User Stats

97
Posts
29
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John West
  • Investor
  • Bath, ME
29
Votes |
97
Posts

Help me analyze this rural Maine deal

John West
  • Investor
  • Bath, ME
Posted

Here is a snapshot of a 4-plex analysis I did on a deal in central Maine. This is a simple 4 box analysis that @Brandon Turner did on youtube one day. I hear people saying they won't take anything less than $250 or $400 (or whatever) cashflow per door. I'm struggling with this one. I keep thinking this would be a huge moneymaker IF I don't need money for capex, or IF I don't have vacancies, or IF I end up managing the property myself someday. I know it would be foolish to make my decisions based on that. 

I'm struggling with the fact that this is a 2% deal, but I still can't seem to make it cash flow really well. When all these people talk about making $200 a door are they setting aside a percent for capex, vacancies, repairs, property management....? It seems like if I can't make this deal cash flow, the ones that will are going to be few and far between...

Would you do this deal? Am I being generous enough with my expenses that the low cash flow is acceptable?

Some additional info:

Assumed negotiated purchase price is $130,000

Seller is helping with 50% of down payment

This will be my 3rd property. The other 2 are doing well, but because I've only been doing this a year, my Debt to Income is nearing its max as income from the other 2 are not counted per any lender. 

Most Popular Reply

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1,168
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1,708
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Ryan Murdock
  • Rental Property Investor
  • Maui, HI
1,708
Votes |
1,168
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Ryan Murdock
  • Rental Property Investor
  • Maui, HI
ModeratorReplied

I don't know the building but I can almost guarantee you at that price point your repairs will be more than $20/mo. I'd also make sure you have ample working capital on hand. One major turnover will wipe out 1-2 years of your cash flow so if it should happen prior to then you will need to come up with the funds elsewhere.

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