All Forum Posts by: Timothy Murphy III

@Account Closed 

Welcome to the site.

Tim

@Robert Arquilla 

Welcome to the site.

Your annual gross rents for that unit at $550/unit/month are $13,200. The 50% rule tells us that, in general, operating expenses are 50% of gross rents. Based on that assumption, your annual income from the property is $6,600. $6,000 annual income on a $65,000 property is ~ 10% return on the investment. Personally, I'd like much stronger returns from a property in the midwest and you can find properties with better returns in the midwest. This is especially true if you can fund and manage a rehab.

Some other factors to take into consideration:

Are favorable financing terms being offered? Will the seller reduce the price?

Is the property truly turnkey with no deferred maintenance and/or renovations required?

Will the market bear higher rents than $550/unit?

What's the neighborhood quality? Is there the potential for price appreciation? a 10% return in some areas / neighborhoods is excellent, in others, it's terrible.

Is a 50% expense ratio accurate? This is a good rule of thumb but some properties may be unusually expensive / inexpensive to maintain, manage, insure, and pay property taxes.

Personally I'm not terribly impressed with it as described but there's a lot of other factors to consider here.

Tim

@Michael Klein 

Check your PMs also.

@Mario Mormile 

Welcome to the site.

Tim

@Michael Klein 

In some cases, yes, and in some cases, no.

As a general way to answer your question, I'd focus on areas with lower vacancy as a whole. I'd rely primarily on my observations of the area (are there lots of board ups? etc) and input from other owners / investors in the area. As a secondary source, I'd look at neighborhood / zip code / census tract level statistics.

If you post or PM me some addresses or areas, I can let you know what my clients have observed.

Tim

@Emmanuel Jr 

Welcome to the site.

Tim

@Jason Narayan 

Welcome to the site.

Tim

@Josh Eitingon 

Welcome to the site.

Tim

@Art Pulphus 

Welcome to the site.

Tim

@Ivan Paxton 

Welcome to the site.

Tim