First Deal, Good or Bad?

[Giovanni Garcia]

Hey Biggerpockets!

I am looking to buy my first investment property; it’s a 3 unit building. I’ve made some steps as to show what my cash flow and other aspects of the property entails using my Cash Flow Analyzer.

Here is the listing from the MLS

http://www.realtor.com/realestateandhomes-detail/3144-W-Jackson-Blvd_Chicago_IL_60612_M83228-42313?source=web

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After I did some running of the numbers, I believe this property as great potential to be a good investment. This property is an a C neighborhood and being rented already cash flowing at about $1900 a month. The cash on cash return is at a 60% which what really grab my attention. Also, the building as some upsides because the first floor unit can become a duplex of course with some repairs and the laundry is coin operator. On the outside of the building it as billboards for advertisement and the option to buy the empty lot next door anywhere from $1,000 up to $5,000. I believe this is a good buy but this is why I am here on biggerpockets to see the inputs of others.

Thanks for you time!

Giovanni Garcia

[Matt Devincenzo]

There you go those numbers look much more realistic to me. I'd say it's a pretty decent deal from the looks of what you posted.

One thing to ask about is the coin-op laundry. If it is the owner's then it's not as difficult but you will need to fix them every now and again, if it is a lease contract ask for a copy of the lease and yes the lease will likely stay with the building. Sometimes owners will sign the contract with a big payment up front and then all that they get the rest of the time is like $5/ mo and you're still paying for the water but don't get any money out of the deal...speaking of which you didn't account for water for the coin op laundry.

As for making the bottom a duplex that would be pretty nice, but don't use that to evaluate anything too much. I've seen agents, sellers, and ever Joe schmo in the world mention the better use like "you can build a home in the rear", or "you can add a unit" or whatever it is that makes the deal have this silver lining for the future. It is very often that it isn't possible it is either 100X more expensive because of one single item like say connecting to the sewer, or that zoning limits have already been met for the number of units or square footage. So buy it for what it does today and if you can do your conversion later then it's all gravy.

Good luck looks like it should be good for your first deal.