All Forum Posts by: Fred A Baugh

Hello,

I am interested in 1031 exchanging four of my duplexes in California into an apartment building in Idaho.  I am having a hard time running the numbers to determine if the apartment is a good investment.  I have all the 2018 income and expense worksheets, but they seem to make things more complicated and confusing to compare.  I would like to use a simple cash flow vs investment to make an apples to apples comparison.  It is reasonable to say:

Apartment Annual Income = $491k

Apartment Annual Expense = $188k

Apartment Annual Net Income = $303k

Apartment Cost = $4M

Apartment Downpayment = $3.2M

Apartment ROI = $303k/$3.2M = 9.5%

Then I can do the same thing with the duplexes but dividing my (Annual Net Income) / (Duplex Equity) to get the ROI on my current investment.

Is this simple approach a reasonable way to assess this purchase?  

I didn't include the mortgage expense yet because I am not sure how to account for it.  Do I subtract out only the annual interest payment, or the entire payment including principal and interest?

Thank you for any input.

$950.00MONTHLY INCOME

$242.33MONTHLY EXPENSES

$707.67MONTHLY CASHFLOW

6.53%PRO FORMA CAP

$8,492.00NOI

$91,500.00TOTAL CASH NEEDED

9.28%CASH ON CASH ROI

10.62%PURCHASE CAP RATE

My husband Fred and I (Linda) just moved from San Diego. We have some properties there and would love to sell them and move them up here. We don't like whats going on in California. We would love to have some homes for married couples that go to BYUI. I think it would be great if we can make a difference in some peoples lives here. We might not make the same amount of money here like San Diego but, thats ok. We looked at some single family homes for the married students and was shocked at how miss managed and broken down they are. The homes we are looking at are just down the street from where I live. 

Thank you Eddie. I'm going to do it one more time and I will show you what I have. Linda

@Eddie Cottingham

We are selling two of our properties in San Diego. Paying off the small mortgage we have and paying for these three. 1031 ex. I've looked at all the taxes and all. We still have a cash flow.

on the manufactured home i get cash flow at $249.29. Pro forma cap 6.79. ROI 14.74. cap 10.18

Duplex Cash flow 303.41. Pro Forma 5.18. ROI 5.96 CAP 6.55%

The properties are in Idaho. The first one is a manufactured home that needs around $20,000 of fix up. They are asking $119,000. We are offering $80,000. The rents would be 950.00 a month. The next one is a duplex. 5 acres. This house back yard goes up to my fathers house. We might be able to put another house on this land. They are getting $1750. a month now. They where asking $329,000. We are offering $280,000. The last one is a half acre single family home. They are asking 170,000 and we offered $136,000. They have excepted our offer. 

My husband normally does this part of it but, he is traveling for work and can't. I'm trying to do this on my own and I'm a little intimidated by the calculator.  

Ok I'll do that now. Thank you.

I have an older gentleman that is wanting to sell me three income rentals. I've tried to put them into the analyzer but, I don't think I did it correctly. I have a duplex and a manufactured home and even a single family brick home. Can someone please help me analyze these. I'm looking to sell my properties in San Diego to purchase these. Help!