First Purchase, Alaska 4-Plex

[Sean Davis]

Greetings Compatriots!

This is my first post, my first purchase, my first foray into real estate investing.

AND I AM TERRIFIED EXCITED!!!

I would love to hear any input from the sages here and become an active member of the community. My goals with investing are to create a 6 figure cash flow after all expenses (including mortgage, insurance, vacancy, etc).

I live in a remote village in the Bush of Alaska. I do not know if I will be here long term and there are numerous complexities in attempting to acquire and maintain property here, so I've decided to invest remotely. Because of this, I feel that I need to utilize a property manager.

I am purchasing a 4-plex in Anchorage, Alaska. I would rate the neighborhood as C, it reminds me of the places that I lived in college. The list price was $350,000 we negotiated down to $330,000 (This should satisfy the 1% rule, I am still trying to get a good enough feel for the numbers to not utilize this as a crutch). There is some CapEx that I'll need to put in come Summer, but nothing structural or safety related. The inspector said, "I would buy this property."

I utilized a spreadsheet from Roofstock to help organize the numbers. I am hoping that I’m being sufficiently conservative, but I am hoping that I can realize more cash flow than this for such a substantial outlay of cash.

Income	Month	Annual	Assumption
	Rent	$3,450.00	$41,400
	Vacancy Factor	$172.50	$2,070	5.0%
	Expected Rent	$3,277.50	$39,330
Expenses		Month	Annual	% effective rent
	Prop Taxes	$385.00	$4,620	11.7% (Actual)
	PM Fees	$262.20	$3,146	8.0% (Calculated)
	Leasing Fee	$81.94	$983	2.5% (Calculated)
	Prop Insurance	$222.83	$2,674	11.7% (Actual)
	Repairs & Maint	$180.26	$2,163	5.5% (Calculated)
	Cap Ex Reserve	$172.50	$2,070	5.0% (Calculated)
	Utilities (Avg)	$600.00	$7,200.00	18.31% (Actual)
	Total	$1,904.73	$22,857	62.75%
Reserves		Month	Annual	Assumption (% effective rent)
	Turnover Reserves	$213.04	$2,556	6.5%
Debt Servicing		Month	Annual
	Mortgage	$1,070.43	$12,845
Cash Flow		Month	Annual
	Unlevered CF	$1,159.73	$13,917	Income - Expenses
	Levered CF	$89.30	$1,072	Income - Expenses - Debt Servicing
Net Operating Income		Month	Annual
		$1,372.77	$16,473

I’d love to hear your thoughts and I am hoping to improve my ability to analyze and execute on increasingly profitable deals.

Thank you for reading!

[Kassandra T.]

@Sean Davis This area is very difficult.

Ive managed that area for many years......Just be ready that many items don't fit on a spreadsheet....like picking up trash around the dumpster because everyone will on the street will use it. I've dealt with murder, shootings of the building, fires, showing a property and calling the cops as I was watching a pimp drag a person, and more. 10% isn't enough for me to strap on a gun and manage here anymore so we have been slowly saying good bye to accounts as there isn't enough money. However thats me.

Some can handle this stress and welcome it as we all start somewhere.

Ps. Don't forget to add leasing and legal costs. It is higher on costs in c buildings unless you have strategies to offset it.