FINALLY - Our First Investment Property!

[Cole Tyrell]

Investment Info:

Large multi-family (5+ units) buy & hold investment in Chicago Heights.

After a few years of research, running the numbers, backing out of a few deals based on inspections (nerves about dealing with inspection items or financial impact of inspection items), and numerous other offers, we have closed on our first real estate investment property! An 8-unit building (all studio apartments) in the South Chicago suburbs. On to the next one!

[Cole Tyrell]

@Marija Sparano Property was originally listed for $329k - we ended up paying $220k. 8 units at $600 per month rent (7 of 8 units are occupied). Financed it at 25% down on a 10 year note with 15 year amortization at 5% interest. Assuming taxes and insurance, 10% management (we have it setup on management lower than this), 10% repairs/capex, 7% vacancy, water is included in rent, and a budget for other operating expenses (snow removal, lawn care, exterminator, dumpster, etc...), proforma shows 7% cash on cash return (13%+ if on a 25 year amortization).

Our goal was to get some positive cash flow with a conservative approach and to have a fully paid off property in 10-15 years.

@Jonathan Puckett I am working with a local realtor (who is also an investor). We have setup a google sheet where he uploads listings and baseline financial assumptions. I do a little more investigating on the numbers and the location of the properties based on my comfort level, and then ask him to setup showings based on that.