Originally posted by @Account Closed:
you're right in that cash flow is much easier to find in East Oakland versus the South Bay. But most of the assumptions on your hypothesis is incorrect:
- no way this property sells for $400K. If they are 3 bedroom units (duplex), then at least $450-500K.
- if it's occupied, it's difficult to get tenants out unless they aren't paying or you pay them to leave (no guarantees there)
- you won't be able to get a loan for 20% down. 25% yes
- rates aren't at 4% anymore. More like 4.5-5%
- renting by the bed is very management intensive and would be difficult from you living so far away. Expect to pay at least 10% in management fees.
Is it occupied? The biggest X-factor is the current tenants, how much they pay, and whether they are willing to leave. If you can't get them to leave, you might have a negative cash flow situation.
Thanks for the detailed answer. Even for 450-500k, this looks a good prospects.
- I agree but assuming that its an REO so would be available vacant
- Why wont I be able to get a loan for 20% down ?
- This should be able to sustain 5% as well.
- Sorry I meant bedroom. I can keep one main lease but 6 bed should go for good rental.
- My biggest assumption is that it's vacant so I can put tenants in at market rent. This was just an example but do you have REI in Oakland area ?
