Originally posted by @Jack P.:
So a few things that jumped out to me:
-No cost for lawn/yard/snow. I'm assuming you're going to have some costs there. Maybe you're doing it yourself?
-on a $74k property, expect to have a lot more maintenance issues than you budget. I would expect there's a reason you could buy a property that hits the 2% rule. Are you spending a lot more up front on a rehab or capital expenses that aren't listed here? Are you doing all the maintenance yourself?
-Same goes for vacancy. I'm not sure of your market, but it may be hard to attract and hold onto good tenants at that price point. I would expect a lot more turnover and bad debt than you calculate. When you're buying for $25-30k/door, that doesn't typically result in 700-credit score tenants.
However, if you can hit your marks here, you're in good shape. I'd be content with consistent 10% ROI.
Jack - thanks for your reply. I really appreciate it!
1) Good catch on the lawn/yard/snow. It is in the other costs but should be higher and broken out. I will break out and add.
2) I understand, but that has not been my experience so far. Maybe it is because I am careful on the purchase. For instance the one I am buying has stucco exterior, new roof, dry basement, new furnaces (3 of 4), new hot water heaters, new plumbing (except for some of the drains).
3) Vacancy - My four unit has only had one vacancy in 15+ years. I upgraded the apartment moved a tenant from on unit into that redone one and then renovated that unit and had it rented. Total vacancy 15 days in over 15 years. The rents are only a little below market (not by much). I don't expect that with these others purchases but thought 7-9% vacancy was a 'safe' % given my experience. What would you set it at?
What does a 'good' move in ready 3 or 4 unit look like in your market? Would love to see numbers - if you have them and are willing to share.
D
