Hello, I have been reading, listening, and learning for a couple years now. I am 43, married with two young kids. The goal is to retire when my youngest graduates High School in 10 years. My wife is on board.
I found a 6 unit that a retiring landlord is selling. It is in a small town near where I live in central Ohio where the economy has been doing ok for the past several years, it is in a decent neighborhood. They are asking $159,000, but his agent has told mine that they would accept $140,000.
Over the past 3 years, the expenses have averaged $10,393 a year. There was a one time large repair of the majority of the windows for $6000 bringing that average up. Removing that they averaged $7055 the other two years. I would be adding $2300 in management fees and approximately $9000 in debt service (assuming $140,000). They are going to need a new roof in the next few years. A very rough estimate for this is $10,000 to $15,000.
They have been running over 90% occupancy. Rents averaged over the last three years are $22,831. The company I would use as property managers thinks it is under market value. They think it should be from $29,880 to $31,800 in rents.
I am approved for a loan from a small local bank on the $160,000 with 20% down (I have in cash) for 6.2% adjustable in 5 years and a 20 year term.
I feel good about moving forward at $140,000, a little nervous about $160,000.
I am ready to call my agent and make an offer but I just need some conformation that I am not crazy and some butt kicking to move forward with it.
