All Forum Posts by: Adrie Moses-bailey

 OK Gotcha, that counts as a cash purchase correct?

 Jay thanks for sharing that, how long did it take you to save up the downpayment

 What do you mean by leveraged your credit?

Hey  I am new-ish around here and would like to get into multi-family one day so was hoping to hear from some investors in the apartment space about how you got started. WHat was your first multi family deal and how did you position yourself for it?

Debt service is not an operating expense, its a financing expense. Operating expenses are only those incurred in the generation of revenue. NOI matters because it applies to everyone while NI (Net income) is personal since every investor can have their own financing structure. Sorry just remembered this point.

I think you are right, if I calculate his numbers with this as a negative return is like 1% but its 12% with it counted as a positive. I think the DS calculation may be wrong as well

I have the following so one of us needs to recheck our numbers. Your financed amount is a little suspicious, how are you putting 25% down on 200,800 and financing only 138,750 when 200,800*.75 = 150,600?

My math could be wrong but according to my model with all things unchanged you would have to purchase this place at 94K to make that return. Your monthly expenses  are 48.44%(837) + Debt service at 47.55%($820) leaving Net income of 4.11% to take to the bank or $71 

 This is what I was considering doing tbh, New jersey seems way cheaper especially newark but I was concerned about the declining population, what part of jersey do you invest in?

According to my calculations your PITI is about 54.55% of your income and debt service is about 39.37% so all in your net income is about $39 a month or $409 a year or 6.09% of your revenue is actually profit which puts you at a CoC of 1.34%.

With the numbers you gave me you could get a 10% CoC return if you either A) pay 15000 all in for the property or find a way to raise the rent to $976 a month. Take it with a grain of salt but I don't see where you have a BRRR if you are paying 44K then putting 20K into a property worth 65K after repair, all in you are paying 64K to sell at 65? What if the market turns against you? The seventy percent rule off thumb would say pay no more than 25.5K for this property.

I performed this analysis as a year one cf scenario so it doesn't take into account what would happen if you bought this deal and then refinanced it into a longer term mortgage with a lower interest rate, even still the difference doesnt seem that significant but it could be. I simply haven't built that capability into my model yet. 

Best of luck, I can't make a recommendation but those are the numbers based on what you have given me.

 This is an interesting point, I wonder going forward if this will lead to higher appreciation in Florida, I heard on NPR this morning there are at least 190K Puerto ricans in Florida right now. That has to have implications in the housing market and politics since those puerto ricans can vote as soon as they establish residency