All Forum Posts by: Chuck Rhodus

Originally posted by @Ryan Blake:

@Chuck Rhodus Looks great! I agree to double check your expenses but even if you are off by $100/unit/month it still looks good. Rent does seem a little low so be careful with your vacancy % and your repair between tenants. At the lower rents, the units tend to get trashed and turnover is high. As long as you account for it, you will be fine.

 @Ryan Blake, the rents were confirmed by each renter I met with and docs from the owner. They agree.

@Ali Hashemi, the rents are competitive for the area but could be raised a tad. Tenants pay utilities and I pay water & trash. All figured in. I also included property mgmt costs. 

I time, updates will be made but now, I see no pressing issues.

@Scott Steffek, I am new at this and I could be doing it wrong. I did also punch it in the bigger pockets buy & hold analysis and it agrees with the 50% roi.

What I am doing is taking the annual cash flow and dividing it into the total investment.

18,564 by 37,400=50%

Some of the renters have been there as long as 20 years. The rents can be increased a little, yes.

The rents range from 500-595. It is I would say a class "C".

As the correction shows the ROI is 50%. I am using increased numbers in all the costs compared to what they are now. For the vacancy, repairs and CapEx I am setting aside $700 monthly.

The correction on the loan is 5/25 years (Jesse Vega of Royal Bank in South Chgo).

Sorry for the confusion.

Give me the good, bad and ugly on my first rental property please.

I am buying a 8 plex in Indiana for the purpose of rental income. There are no repairs to be done. Here are the details.

monthly rental income $4,325 x 12=51,900

cash flow $1,606 x 12= 19,272

approx. NOI 29,407

cash on cash ROI 41.89%

monthly expenses 2,719 x 12= 32,628

purchase price 157,000

25% down= 40k

financing 117k

5.1% 5 year arm / 30 years

my expenses include tax, ins, water, sewer, garbage, vacancy, repairs, capex, prop mgmt, mortgage.

I’m looking to make an offer on my first investment property very soon. I am deciding on a few choices. It could be a house or it could be an apartment building, not sure yet. A little advice here if you can help me. What are important things that you feel should be in my offer? My real estate broker does not have a lot of experience in this field and I have no experience in this field. He may do a good write up but regardless I wanted input from investors.Any recommendations to put it in my offer in writing would be appreciated.

As far as repairs, there are none that I’m aware of. It is a eight plex fully occupied. There is plenty of room to increase rents and it has two newly renovated units. You have to admit, it has a great ROI including the HELOC. 17%!

Here is a little more detail. The Roi is 17% including the HELOC and I have included every expense that I can imagine. So without the HELOC the ROI would be even higher. I figured the additional monthly payment would be paid from the 17% and still have about half remaining. Without the loan my expenses would be about $700 a month. If nothing serious happens most of that would accumulate. I would not take any money for me but put all against the loans each month. I guess we all are open to using a financial partner, what is the difference? I have another $600 a month that I will also use toward the loans. I figure that I would have at least $900 monthly toward the loans. I appreciate your input.