All Forum Posts by: Steven Grabowski

I have an offer accepted on a property that is 2 three bedroom duplexes, and 10 garages. The price is $53k.
I estimate approx $20k to fix it up (roofing, plumbing, some electric).

Garages are all rented out for approx. $360 for all of them (I can ultimately get $40 a month easily for each garage unit). 2 of the duplexes are rented $450 / month and $475 a month.

The other duplex once fixed will rent conservatively for $450 a month each.

Income: $2225
Expenses: $1112.5
Mortgage: $488.44
Cashflow: $624.06

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removed.

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Can anyone recommend a site that has leases for PA? Either a free or member site...

I currently have a duplex, but am purchasing a 4 plex and I'd like to look at some updated leases for PA.

I'm looking to put together a new package for this new property...

Property condition check list for start and end of leases, etc.

Thanks for all your help!

Edit: Also, I've read all the steps on screening tenants... However to do criminal background checks and credit checks, what forms do you need them to sign off on?

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Originally posted by "FDCaptain":

I am new to the forum and would appreciate some outside insight.

My wife and I are in the process of buying a 4 plex apartment building. We have been landlords before (although single family) and my question is basically a financial one. The four plex is an easy decision for us...5 minutes from our home and well maintained with 2 long term tenants. Even considering vacancy rates and maintenance/repairs the property should cash flow enough to pay off itself in about 12 to 14 years. We do not need the cash flow for income now. That is putting 10% down.

So here is the caveat, behind the four plex is a duplex offered by the same seller. Maintaining both next to each other would be ideal. However the duplex has a negative cash flow. Both properties together would still cash flow positively but not enough to facilitate much of an early pay off. The duplex is also well maintained and has even longer term tenants.

Of course the question is do you buy negative cash flow property? I like the idea of the property paying itself off early. I would rather not put any other income towards the early pay off of the real estate.

I have done some market research in the surrounding area and it seems the rents are on par with other properties.

Will a duplex appreciate more than a 4 plex?

I plan to hold my properties long term and would like them to be paid off when I retire in approximately 13 or so years. I will be managing the properties and can handle all but major mechanical repairs.

Thank you for your opinions and advice.

If it is an income property - and sold as an income property, it should cashflow. If it doesn't, they are asking too much.

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Originally posted by "MikeOH":

Yes, they are!

Mike

So, Mike, my figures look correct?

So, if I have $800 rent...

$400 for expenses (taxes, insurance, maint,e tc...)
$400 left to pay debt and profit...
so, In my pocket, I have $400 - Mortgage
??

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Originally posted by "Trant":

Originally posted by "gskicons":

It has a 2 bedroom and a 3 bedroom apartment. The 2 bedroom is rented at $350 a month - they have admitted that it should have been rented at $400. The 3 bedroom should be rented for $450

Income: $800
Expenses (50%): $400
NOI: $400
Mortgage (20 yrs @ 6.75%): $342
Cashflow: $78

This doesn't work at their asking price... I need 1.2 + debt to income ration for my lender...

So, if I offer $30,000, cashflow is $172 ($228 payment)...

FYI: taxes are only $600 a year.

Any pointers? I think this may just be one of those houses that are just an exercise in learning, which is fine. Better to learn than to lose.

If taxes are $600 a year then that reduces your monthly cashflow by $50. Your calculation of cashflow at 45000 was $20 off ($400-$342=$58) and if you subtract the $50 for taxes you end up with $8 a month. You NOI calculation is not including vacancy either (which at a fairly standard 8%) drops your monthly cashflow another $64 leaving you at a $56 per month loss.

Isn't vacancy in the 50%? I thought ins. and taxes were also...

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Okay, So I guess this isn't my first residential rental. I have another duplex that I lived in, couldn't sell, so now I rent it.

This is my first property bought with the intent of renting it immediately.

This house is a duplex - they are asking $45,000.00

It has a 2 bedroom and a 3 bedroom apartment. The 2 bedroom is rented at $350 a month - they have admitted that it should have been rented at $400. The 3 bedroom should be rented for $450

Income: $800
Expenses (50%): $400
NOI: $400
Mortgage (20 yrs @ 6.75%): $342
Cashflow: $78

This doesn't work at their asking price... I need 1.2 + debt to income ration for my lender...

So, if I offer $30,000, cashflow is $172 ($228 payment)...

Am I thinking correctly? I personally think the 50% rule expenses are high as I am doing my own managing and 'fixes'... but everyone seems very certain about it, so I'm working from their experience.

FYI: taxes are only $600 a year.

Any pointers? I think this may just be one of those houses that are just an exercise in learning, which is fine. Better to learn than to lose.

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All Forum Posts by: Steven Grabowski

Steven Grabowski has started 6 posts and replied 27 times.

Post: Evaluate this Deal Please

Post: Creative Finance Question

Post: Leases

Post: Negative cash flow...please review

Post: ISO First Deal - How does this sound?

Post: ISO First Deal - How does this sound?

Post: ISO First Deal - How does this sound?