All Forum Posts by: Andrew Michaud

3 unit multi-family. Appraisal value 90k, selling price 70k. 15 year mortgage at 4.5%. Down payment 20% or 14k. Annual mortgage cost $6300.

Rents:

2 bed $600/mo tenant pays electric and heat

1 bed $550/mo tenant pays electric

1 bed efficiency $400/mo tenant pays electric and heat

Annual income $18600

Expenses:

Heat $850

Trash $300

Water/Sewer $1100

Taxes $1900

Insurance $700

Mortgage $6300

Total expenses before repairs/vacancy = $10850

End of year profit would be $7750. Lets take potential vacancy and repairs into consideration.. that would leave me with lets say $5000. Would this be a decent number to make it worthwhile on this property? A big chunk of expenses are coming from my mortgage which I would shoot to pay off the loan asap from other sources of income but disregarding that factor, I am curious if that is a worthwhile number on a 3 unit building. Thanks!

Both properties will bring in 11k per year before considering vacancies or repairs. So insisting that the 5plex has a much higher vacancy rate, the 3plex has the better cash flow in the end, but more expensive purchase and larger loan amount.

@Jeremy Dugal its great to be in touch with someone nearby. Thank you for the great advice. This property is located in Limestone. The numbers all work great if I can keep the units full. I am looking at other properties in Caribou and PI that cost 3x more per door. 100k for 3 units. But vacancy rate would be much lower I would imagine. Not as much equity in the Caribou and PI properties either. I am a little unsure on what to do. Almost went in for this Limestone property but my gut told me to wait and the only thing holding me back is location.

5plex: 60k selling price, tax value is 95k, market value is 120k. Private sale. This is in a dieing town which I feel would make this building a high vacancy rate, but if I can keep this place full I see a quick return on investment and nice equity. Also feel it would be a difficult building to sell in the future due to the town. Very small town. Not much going for it and most of the jobs are outside of this town.

3plex: 100k asking price, tax value 110k, market value 120k. In a busy area. Lots of jobs around this area. Right on main street. Great location. Building is in the same condition as the 5plex. More money and less units but the vacancy rate should be a lot better. I feel there wouldn't be a problem filling a unit when a tenant leaves. But almost 3x the price per door as the 5plex... 

Which would be the wisest choice? They say you make your money at the time of sale on regards to what you paid for a property but does location outweigh the price on this? Both buildings will bring in roughly the same annual income. 5plex has cheaper rents and more expenses, 3plex has slightly more rent per month and slightly less expenses. 

Here is what my expenses and income look like:

Monthly income - 2350 x 12 =28200

Annual Heating - 5000

Annual Water/Sewer - 2600

Property Taxes - 2300

Insurance - 1400

Mortgage (375/mo) - 4500

Trash - $550

Lawn/Snow still in the air. Debating on doing myself or hiring out. Lets say $1200 Annual

$17,550 total expenses before repairs/vacancy. Tenant pays electric. That leaves me with a little over 11k profit with a 0% vacancy rate. If I have 40% vacancy for 12 months I break even. Basically I have to keep 3 units occupied to break even.

All 5 units are $500/mo, I am financing 48k for 15 years. I have heard stories in this town about some apartments taking over a year to fill 1 unit. This gave me a little cold feet but at the same time I wonder if there is a reason that unit stayed vacant.. This is also a private sale.

I am looking to purchase a 5 unit apartment building in a small town in Maine. I am getting a deal at 60k for the building. Appraisal value is 120k. 3 units occupied, two vacant currently. Building is in fair condition and in no need of any major repairs. Everything sounds good except for location. Its in a dieing town. The town has 1 gas station, 1 grocery store, 1 restaurant. Surrounding towns and cities are 10 miles away which isn't bad. 

Only thing I am afraid of is getting tenants into this building. But in such a small town you would think people will only want to rent. This town doesn't have much to offer but the numbers all work great if I can keep the building full. Advice?

I am looking to purchase a 5 unit apartment building in a small town in Maine. I am getting a deal at 60k for the building. Appraisal value is 120k. 3 units occupied, two vacant currently. Building is in fair condition and in no need of any major repairs. Everything sounds good except for location. Its in a dieing town. The town has 1 gas station, 1 grocery store, 1 restaurant. Surrounding towns and cities are 10 miles away which isn't bad. 

Only thing I am afraid of is getting tenants into this building. But in such a small town you would think people will only want to rent. This town doesn't have much to offer but the numbers all work great if I can keep the building full. Advice?

Three units are 1 bed 1 bath at $500/mo and one unit is 2 bed 1 bath at $500/mo. Commercial space is also $500/mo. I feel I can get more out of the commercial space and 2 bedroom unit but after the fact, I am expecting to see $2500/mo income before expenses

I am looking at a 5 unit apartment complex. I've been getting all the info I can on this place for the past couple weeks. Got the seller down to a nice price of 60k. Appraisal value on this property is 120k. All units are occupied and building/units are in fair condition. I got approved at the bank with no co signer last week. 4.75% interest fixed for 5 years then fluctuating there on for a 15 year mortgage. 20% down payment. So I will owe 48k. I am putting 12k skin into the game and expect a minimum of 8k return per year and maximum of 12k depending on repairs/vacancies. I don't have a house. Still live with family, want to get my hands dirty with real estate and build a nice portfolio. I have a very good constructuon background and plan to put some decent sweat equity into this building. My father is a building contractor, I do carpentry full time and also have an associates degree in Building Construction Technology. I feel the ball is in my court on this opportunity. I am a little nervous on what to expect and whether I am in the condition to go for this big move in my life. My biggest move I have ever made was a 12k loan on my 25k pickup... Should I go for this?