All Forum Posts by: Account Closed

@Devin Deswert. I don't drink, but thanks for the advice anyways. I have some time till retirement and I have time for trial and error but I'm averaging a 24% ROI on my last two deals for the past 4 years without calculating appreciation. I have positive cash flow coming in monthly that I'm re investing into stocks or real estate. If I had factored in all the same numbers above and advice for my last two deals, I'd be where most people are today; either not started or still trying to find "the perfect deal."

This deal is bringing in positive cash flow regardless of the expenses ~5% to ~13% returns on my investment. So I can either leave 100K in a bank earning 0.0025% interest and keeping looking for the "perfect deal" or I can buy this property and invest it into a what I call a "real estate savings account" that will provide me with an annual return of 5%-13%, pay off it's own mortgage, provide me with an asset, income I can reinvest, and liquidate if needed within ~6 months.

If I hold this property for only 10 years with the same expense ratios and not factoring in appreciation or rent increases; I can an expect a net cash flow of ~$56,000 to ~$130,000 and will have $57,000 of the principle paid off by 2027. I will be 37 years old with an asset worth $400-500K and a loan amount of $243K. I could then sell; get my initial invest out of my "real estate savings account," profit $107,000 (if sold for only $450,000), and enjoy the cash flow of $56-130K invested over the 10 years!

@Jimmy S. Thank you. I truly appreciate the reply and informative advice! It's great seeing different cost perspectives on the deal so I can play with different numbers. My calculations were slightly different and I would also agree with @Sanjeev Advani about some of the costs being on the higher end. 

Looking at the current lease agreements the tenants are long term tenants and the area is in a Landlord friendly area. The units are in need of no "major" repairs except roofing ($13,000) i'm assuming within 5 years.

Update: My lender is asking for a 3 year roof cert. I'm currently waiting on a roof certification before proceeding with the deal. If the roof doesn't get certified then I will ask to renegotiate the deal. 

My proforma calculations for 2017

Monthly Payment: $2231

Rent Income: $3800

• Property Management (negotiated): 5% -($190)
• Vacancy: 3% ~($114)
• Gardening (negotiated): -($75)
• CAPEX:5% ~($190)

Monthly Cash Flow: ~$1000 (depending on vacancy/capex)

Annual Cash flow: ~$12,000 (depending on vacancy/capex)

NOI: ~11%

Hi, 

This is my first post on Bigger Pockets and I'm excited to be part of the Bigger Pockets community.

I'm a new investor and have zero hands-on experience in multifamily properties. I've read a few real estate books and watched countless BP podcasts. I'm currently in escrow on my first 4plex multifamily deal; it's closing in less than 15 days! I'm excited and nervous at the same time! 

The property is built in 1980 and is located in Bakersfield, California. It is in a C+ neighborhood and is at 100% occupancy. It is being sold at a 8% cap rate. Each unit is rented for $900 (market rent for the area is $950-$975). The property is in need of a new roof soon and minor repairs (inspection completed/roof should last a few more years). There is some termite damage to one wall in one unit (repair cost $600). I would appreciate some feedback on the deal and any ROI calculations after factoring in costs for property management, maintenance, gardening, utilities, repairs, etc.

Here are the numbers. What do you guys think? Thanks in advance!

Built: 1980

Type: 4 Unit Multifamily (3 bedroom/1 bathroom)

Purchase Price: $400,000

Market Value (appraised): $400,000

Down Payment (25%): $100,000

Loan Amount: $300,000

Interest Rate: 30 Year Fixed 5.0% (5.074% APR)

Principle & Interest Payment: $1,610.46

Property Taxes / Insurance : $645

Estimated Closing Costs (1 time): $10,307

Lender Credit: ($1,375)

Total Cash Needed to Close: $108,932

Total Monthly Payment: $2,231

Monthly Rent: $3600