All Forum Posts by: Caleb Godsey

Thanks for the help Joshua! I appreciate it. Definitely going to explore my options because that's the one bothersome thing with this property – the utilities. If they were covered by tenants, it would be a done deal. I'm checking comparable properties in the area and most seem to be renting for $850-900. So the $650 tenants are currently paying for may be significantly under valued. 

I'll keep you posted if I purchase the deal, get financials, etc. to let you know what I did and how things go.  

@Raul Cesar cortes

I don't believe the units have backyards. It's not in the Austin area but in a decent sized city within a 100 mi radius of Austin. I don't know that I could manage the property on my own. This would be a long distance purchase from where I live.

Hi @Bjorn Ahlblad! Could you explain a rent roll to me? Asking for all the financials and leases from my realtor so hopefully I'll see all those this week to know more history about this property. Anything specifically I should be looking for in these docs? Thanks for the tips!

@Anthony Wick, the $500 number was from the current owner. She mentioned she pays on an average of $490/month for all three units. I know Texas usually has higher utilities because of the heat...know from experience being an Iowa native myself. (I see you're from Ankeny). 

I think the vacancy will probably be more like 3% or less, but just incase, factoring in the areas average. 

 What's a typical 15 yr rate that you see? Do you know any lenders in the Austin area?

I don't know if I factored in major repairs, just a monthly maintenance of $90 I believe. CapEx is something I should consider.

 In your experience what are some problem areas that you would look for while inspecting the house?

 I'll need to get a copy of the lease and financials. This is a good reminder to make sure I do more due diligence. I believe electricity & water are what I would be paying. Supposedly rent is higher than usual because utilities are included. 

As far as rental period, not quite sure how long the tenants have been there, although historically because of several churches in the area, the home generally has a very low, if any vacancy rate. But the area in general is about 8% vacancy, which is where I got that number.

 So I'm curious if you know average costs of this. My guess is that it's a bit pricey to do this and potentially not worth the investment but it is something I've thought about. I believe rent factors in the fact that landlord pays for utilities, so I think rent would have to go down a bit if they paid for utilities. Kinda evening things out probably.

Any additional thoughts or experience with situations like this?

Hello BP Community!

I'm just getting started in reel estate. Been ramping up on education & learning as much as I can over the past 4-5 months. I'm starting to settle in on a specific property and this one came across my lap today. I understand everyone has different opinions and there are lots of variables in real estate, but I'm trying to familiarize myself with what a good deal looks like. 

Here's the numbers, curious everyones thoughts on if they would/wouldn't take the deal and why/why not.

Tri-Plex

Listed for $130,000, verbal offer that they would accept at $110,000

Rental Income

Unit A: $650

Unit B: $650

Unit C: $650

Total All Units: $1950

Expenses

Mortgage: $500/mo (20% downpayment, conventional 30-year fixed loan @ 5.5%)

Property Management: $195/mo

Vacancy (8%): $156/mo

Property Tax: $150/mo

Maintenance: $90/mo

Utilities: $500/mo

Insurance: $90/mo

So by my estimation, it's cash flowing for about $270/month. Realtor says the rent is kinda low and could charge about $700 per unit, but I'm trying to be conservative with the numbers. What are your thoughts on this and what realistic things could make this a better deal?