All Forum Posts by: Dimitri Metropulos

Hello all, 

I am newer to REI and am looking to find a deal and close on it before the end of summer. I started by looking at properties on the MLS and using a realtor before I discovered more about the discounted prices wholesale properties can offer. What are the pros and cons of both methods?

Does anyone have any insight they can share abut what works best for them? My goal is to buy a multifamily property, rent and hold it.  I am in the Cleveland OH area.

Let me know what other details you need from me about my situation, thanks!

@Sanjeev Bhatia  As everyone has stated already the East side of Cleveland is not an ideal investment area.  I would look to the west of Cleveland for an investment property as they have been constantly doing work to revitalize that area.  

Good luck!

@Paul LaSpina What other way would I evaluate a residential property?  This was the only way I have seen to evaluate a property.  I have looked at comps and a similar multifamily down the road sold recently for $125,000.  I am hoping to get my property for $110,000 or lower.  Do you think that is a reasonable ask? I haven't submitted an offer before so any advice you can lend on that would be appreciated as well.

Thanks

@Victor S. Thank you for looking at the C-o-c numbers with the added expenses that I missed out on earlier.  I haven't had an inspection yet but from everything I have seen the house looks in pretty good shape and nothing major (again that I saw) would be an immediate problem or within the first couple of years.  

It is a straight up cash flow deal on this property.  To add value though one of the units is being rented at $850 month and the other is being rented at $675 month.  I would like to match the $850 a month because both of the units are almost the same in size and layout.  I did not count that into my numbers above to stay conservative.

Thanks!

@Eric Meyer  I appreciate the advice and giving me examples of how you run your numbers and look at properties.  I have just begun analyzing deals and am just trying to make sure that when my numbers show me a good return I jump on the opportunity and feel confident that I have taken all of the correct steps in getting there.

@Caleb Heimsoth What are the standard PM rates you see in your market?  I know they might be different from my area but just to help ball park that expense.

@Eric Meyer Thank you for your feedback as well.  I agree with you that I would rather be more conservative and clearly in this situation I was not.  I would like to ask you the same question I asked Joe, What are the returns/cash flows and etc. you use as benchmarks when you are running numbers on properties you are investing in?  Again as not even a first time investor yet the ability to "know what a good deal is when you see it" is what I am striving to work towards.  If you have any additional advice or information you would like to share I would be happy to hear it!

@Caleb Heimsoth I would be managing it myself.

@Joe P.  Thank you for the feedback!  As I stated it would be my first deal and I imagined I would have some gaps in my initial numbers and happy you responded with your feedback.  I will include the closing costs, higher insurance costs and water/sewer/trash as I continue to look at my numbers, tenants are paying the rest of the utilities.  

I only did the 5% maintenance because that was the way I saw it on the formulas to calculate but you bring up a good point that it might not always be enough. How much would you advise to put away for CAPEX/maintenance in this situation? Overall the house has been taken care of nicely, roof is 10 years old but looks in good shape, electrical was recently redone as well.

I understand that you can't say the deal is good because of course you don't know the neighborhood or anything, but from just a numbers perspective what are the returns and cash flows you look to achieve when investing in a property?  I am trying to crunch numbers on all kinds of different properties in areas and would love some benchmark numbers that I could use to know if I should be interested in the property or not.

Thank you again for your help!

I am new to investing and am looking for my first deal.  I think that I have found a good multifamily property with 2 units both of which are occupied currently.  Both of the tenants have been there for a long time and look to be taking very good care of the property.  I am a little hesitant, but very excited to make my first deal and want to ask you (the experts) if you would invest in this property given the numbers I have. The loan would be for $82,500 over 30 years.

Purchase Price: $110,000

Down Payment: $27,500

Gross Monthly Income: $1,525

Expenses: $815 monthly

-Mortgage $415

-Property Tax $136

-Insurance $35

-Vacancy $152.50 (10%)

-Repairs $76.25 (5%)

Net Monthly Income: $710 or $8,520 a year.

The Cap Rate = $13,500/$110,000 = 12.27% *note I did not include the mortgage expense of $415 in my calculation.*

Cash on Cash Return = $8,520/$27,500= 30.98%

With that basic math I see positive cash flow of $8,520 which would pay off my loan in about 9.6 years which I think is a pretty good number. Should I be looking for a more aggressive ROI? Am I missing anything in my calculations? If it were your first property would you do it? What are the margins you look for in your investment properties?

Thank you in advance for all of the help!