All Forum Posts by: Andrew Michaud

That is net. Including mortgage, lawn, snow, trash, water, sewer, heat, electricity, a small percentage per property for misc and repairs. 

I am comparing what I am making here in Maine to the difference in other states. I feel I am doing pretty well, but may be wrong. The difference with Maine is our properties are much less expensive which helps our mortgage. I have been averaging $275-300/door after debt services.

What are you making in your area?

Bob, thank you sir. This answers my question.

I have been approved on a loan for 15 Yr, 20 Yr Amortization. What does this mean? 

Am I paying off the loan in 15 years or 20 years?

Am I paying off the interest in 15 years and paying off the rest of the principal from year 15 to 20?

Have done some research but still cannot figure this one out. 

I recently bought a 6 unit that is fully rennovated, excellent shape, new roof, heating is in good shape, rents are great. This is great but gives me little room to add value to the property. These units come with their own 1 bay garage. I have a 3 bay garage on both sides of the property. I would like to convert these 3 bay garages into two units each. 1 bed 1 bath, and with some work on the floor plan I may be able to squeeze 2 beds. Using the existing shell and adding two floor plans seperated by a wall, I can pretty simply have two added first floor units per side of the building. I recently rennovated a 1 bed 1 bath unit on another property for about 6k. I expect after replumbing, electrical, town water/sewer hook ups, entry doors and windows cutout and of course everything in between to have about 15k into each unit. Will have 60k invested, expected 140k value add, and after decreasing existing rents a little without the garages, but adding 4 new rents I see about 10k added cashflow. Thoughts?

60k invested

140k expected value added

10k increase in cash flow

I am in the process of purchasing a 6 unit apartment for $265,000. It's very localized, B-Class area. A walk away from many gas stations, grocery stores, 1 mile away from the hospital and walking distance from schools. Property is in great shape, new roof, vinyl siding, new windows and heating systems are in good condition. I usually set myself a maximum price I am willing to pay per door, but I have gone beyond that on this one because of location and its quality units. Here are the specs without getting far into detail.

Purchase Price - $265,000

Tax Value - $255,000

20% Down Payment - $53,000

20 YR Mortgage

All Tenants pay utilities. Heat, electric, cable, water and sewer is metered out also.

Insurance, taxes, trash, vacancy, repairs, snow/lawn add up to 18k.

Gross Income - $56,000

Mortgage - $16,000

Income after expenses and debt services - $22,000

Cash Flow Per Door - $305

CoC Return - 41%

Cost per Door on purchase price - $44,000

Retail per door in my area currently - 30,000-35,000.

Numbers work great. Expenses are accurate and very low due to tenants paying all utilities. I am paying above what I feel I should pay on paper, but it is a nicer property than many around here. All units are 2 bed 2 bath, ground floor, and have their own 1 bay garage. 

I know the numbers work. My question for everyone is the purchase price looking at tax value and retail per door.

i like to base my net income as what I will be putting in my pocket after all expenses and debt services. 38k after expenses and 18k after mortgage is what I was referring to. Thanks I appreciate the input!

I am looking into buying this 6 unit apartment. Interior and exterior fully updated, important items such as heating, roof, etc updated. Fully turn-key. It produces 56k Annual Gross Income and after expenses makes 38k/yr. Tenants pay all utilities so expenses are low on these units. Mortgage after 20% down payment will be about 20k. Net income 18k, cash invested before closing costs $53,000. I will be paying about 45k per door for these units and they will be paying me $3000/yr each or $18,000. Good deal or is asking price too high? Have tried to negotiate and she has came down a bit but is holding on pretty tight. Property does produce well I would say but is it worth the cost? What on your thoughts on this deal? Pull the trigger on hold back? One thing I like about this property is its an actual building build for apartments. All first floor and everything metered out properly. Its not a massive 100 year old home turned into a 4plex. Thanks!

Income

Unit 1 - 1250/mo - 15000/annual 

Unit 2 - 450/mo - 5400/annual

Unit 3 - 475/mo - 5700/annual 

Unit 4 - 625/mo - 7500/annual 

Unit 5 - 400/mo - 4800/annual

Unit 6 - 600/mo - 7200/annual

Unit 7 - 475/mo - 5700/annual

Unit 8 - 1250/mo - 15000/annual

Total Monthly - 5525

Total Annually - 66,300

Expenses 

Property Tax - 7,500

Insurance - 3,000

Water/Sewer/Trash - 1,700

Electric/Oil - 3,500

Cable/Internet - 1,800

Lawn/Snow - 1,000

Repairs/Vacancy - 3,000

Total Expenses - $23,200

Mortgage - $22,000

66300

Total - 45,200

Net Income - $21,100

I guess I had a couple of other things running through my head when calculating last night.. but these are the stats. We are now at 21,100. Lets call it 20k and put the rest towards vacancy/repairs. 

70k initial investment, 20k annual income after all expenses and mortgage. Is this still a good deal?