All Forum Posts by: Garret Coffman

@Guifre Mora

I don’t get how you used excel for the debt... 😑

@Guifre Mora 

Incorrect. Monthly income after the vacancy rate is $31017.50 per mo. I'm confused on how you added to the vacany if I got 25,000 a month before adding to vacancy shouldn't it be less? You came up with $31,017.

Incorrect. Monthly Operating Expenses $12323.33 Now you just took 40 percent of the 31,017 you came up with. 

Incorrect. Total Annual Debt Service $204,758.50. $17,063.21 per month. You are also missing closing costs into the deal. So how did you figure this, even with adding 37,000 into down payment of 948,750 I get 56,925. At this point I'm seriously lost.

Incorrect. Total Monthly Cash Flow (before taxes) $1630.96. ($19,571.54 per Y) Cash on Cash Return (ROI) 1.98%. (I included 37K in closing costs 1%) This would be easy to figure out once I figure how you got the total annual debt service. 

I see that I'm not entirely off, I just did not include my closing costs and vacancy rates. The down payment needs to be much higher to meet at least 3x the asking price.I need a higher loan to value ratio. 

@Bjorn Ahlblad Yea I think you could get better than 6% especially in 2020. I don't think this deal would make sense even with a lower interest rate. This place is completely rehabbed as well, just needs a lower price almost 4 million...

@Bjorn Ahlblad Wonderful!

I have a few more questions...

Is the 6% interest rate good to use for most multifamily investment properties?

What about repairs how do I calculate those into the deal if let's say 1/3 of the units?

The deal 

https://www.loopnet.com/Listing/4300-Rosslyn-Rd-Houston-TX/16820570/

Down payment is 25% of purchase price so I got 948,750 with remaining principal of 2,846,000.

Income 7 of the units rented for 8050 and 20 units rented for 25,000 giving me annual income of 61,920 and monthly income of 12,000.

Expenses I was told by GC that you take 40% of your gross income to calculate expenses. Which is fair, it ended up geting 61,920 in expenses coming out to 5160 monthly.

For the debt I used a 6% interest rate is this correct? This is where I get confused with analyzing deals. With a 6% interest rate I came up with 170,775 annually and 14231 monthly. 

So the CASH ON CASH return is 55,000 annually and 4578 monthly. Giving you a 5.7 ROI.

This doesn't seem like a good deal. Are my numbers off? My last question is how would I calculate repairs into this?

Thank you!

Hello,

First time posting here looking to buy my first deal soon.

https://www.zillow.com/homedetails/525-Farnsworth-St-Pittsburgh-PA-15207/11544694_zpid/ <--- Not planning on buying just verifying I get this.

I'm using the four quadrant method to figure out the cash flow on the property.

So 20% down on this property would be 77,800 which would leave me with 311,000 in principal, good so far. Now each unit I could rent out for 1300 a month giving me an income of 3900. Now for the expenses part I was taught that you should estimate that expenses will take up 40 PERCENT of your income which is 1560. 

Now if this is all correct I can't figure out the debt. This is calculated by taking interest rate multiplied by reamining principal of 311,200 correct? If so, what does that number mean is it  mortgage on top of  expenses? I know once you figure debt and expenses you just subtract it from the income.

So, if interest rate of this property was 6 percent (theoretical I can't find it) than the remaining debt would be 1556 a month? Giving an monthly cash flow of 784 making this a moderate deal? Now with that how do I calculate ROI?

I know I could just use biggerpockets calculator but whenever you get into 8+ units it becomes inadequate entering all of the units. 

Last comment would you buy this deal if your in the Pittsburgh area based on location and crunching the numbers?