All Forum Posts by: Derek Kirkwood

Some of these REIAs might have good recommendations:

http://american-reia.com/louisiana-real-estate-and-landlord-clubs/

Richard,  I like analyzing so I'm happy to help.  I ran the numbers and seeing about 8% cash-on-cash.  I used the numbers in your calculator which I noticed are more conservative than your post (1200 instead of 1300 rent, 900 insurance, 2500 taxes).  I like the idea of going slightly conservative.  Here are thoughts that came to mind:

• You mentioned a slightly declining area but your assumption for appreciation is 3%.  What if it does not appreciate and maybe even depreciates?
• Is the water bill you pay based on only the upstairs being occupied?  What if your water bill doubles once the entire building is occupied?
• Maybe go with higher than 8% vacancy allowance at least for the first year while you rehab the bottom unit?
• Your maintenance/Cap Ex allowance is about 17% which seems smart considering the age
• You used 65,000 selling price, but they may stick to 69,000
• I think you know this already but the $400 after costs is your net operating income, so before tax cashflow is $137 just to be clear

Overall it seems like you got everything covered and the numbers look good to me if correct.  Any chance you could self-manage?  Without the PM cost the numbers are a no-brainer.  

How has the due diligence been going?  You have a copy of the upstairs lease?  The units are separately metered for gas and electric or you bill them pro-rata?  

I would want to know if the utilities are separately metered, and which if any of the utilities are paid by the landlord.  I'm guessing based on age they are not separate.