All Forum Posts by: Ali Ahmed

Originally posted by @Ryan Moore:

Originally posted by @Ali Ahmed:

@Ryan Moore:

Thanks for the helpful insight about the market in Phoenix. I am in talks with seller to get the price down a little to make me justify the purchase. And I wouldn't be doing that if it wasn't for your comments. Hoping to get the PP to 280k. 

 A lower negotiated price will definitely be a good idea.  Just keep in mind, if you went down to even 280k per building, and still plug in for the 5% in all areas like I mentioned before, that bumps you up to ~$75/door w/ minimal put towards repairs, capex, vacancy.  With 8 units, I'm assuming 8 AC's, 8 of many other appliances, etc... I think I know what property you are looking at, there is a lot of yard to maintain.  Plus, your property manager numbers are pretty low... but I know you said you already have a PM at your other properties so I can only assume that is the correct fee schedule?

I am guessing the Hoa will cover the outdoor landscaping and electricity. We plan to charge back water & sewer to tenants and my pm handles that. Pm fee is discounted as I have my other properties with them. 

Monday is when I get my inspection report, based on that I will take my next step. 

Ryan, this is off-topic - are you managing to find properties that bring in 100+ per door in Phoenix/ Mesa/ Chandler area listed on mls?

@Ryan Moore:

Thanks for the helpful insight about the market in Phoenix. I am in talks with seller to get the price down a little to make me justify the purchase. And I wouldn't be doing that if it wasn't for your comments. Hoping to get the PP to 280k. 

Just based on my prior experience in Mesa and Glendale (have triplex and sfr) I am going with Phoenix. This is located close to Glendale and I feel I can raise rents to bring in 2800 per building. I tried looking at other places to invest but I have family there and I visit the place anyway. Also they help looking into the the property when buying and that gives me confidence. Moreover I am very satisfied with my property management company that does an excellent job and always on top of things. All these factors made me stick with this location. I know this should be a reason for me to look elsewhere but reading some horror stories of property management companies just makes me not want to go elsewhere. Do you have other recommendations at other locations that have a better cap rate?

Originally posted by @Cody L.:

You lost me once you mentioned you were paying more than 100x monthly rent.

I’ve bought and sold about 2000 units and offered and looked at many more. It’s hard to make money if you’re paying over 100x. Unless it’s a high end Property with little to no expected capex/opex and appreciation is part of your calculation

 I used to do that math until I found there is not much in the Phoenix area that satisfies the formula (unless you are a wholesaler or cash buyer). I am getting restless as I have this money that I would like to work for me and after 3 rejected offers and 1 falling through, I am going with this. Been in the market for 6 months now..

I would need a property manager as I am out of state. I am hoping to raise rents as the estimated rents in the area are about $100 higher per door. I will get a better picture when the home inspection report comes. 

Hoping they are in good condition and not in need of major repairs.

Hi, I am new to bigger pockets and I am really enjoying the content this website has to offer. 

I currently got into a contract for 2 fourplexes and need help deciding if this purchase is worthwhile or not. The reason I am in doubt is because insurance for each fourplex is costing 150/ month and this takes a hit on my cash flow.

I am cleaning out my accounts to put 25% down on this. Conventional loan 30 years at 5.35%

Purchase price 305k each

Taxes 3600 (big lot) & 1800 

Insurance 150 each

Management fee 200 each

Hoa 250 each

Management fee 200 each

Mortgage (P&I) 1263 each

Total expense = (1263*2) + (200*2) + (250*2) + (150*2) + 300 + 150 = 2526+400+500+300+450= 4176

Gross Rents 2600 & 2800

Cash flow = total expense - gross rent= 1224 ( about 612 for each multiplex or 153 per door)

Based on the webinar I attended by Brandon from bigger pockets recently, he looks for anywhere from 100 to 200 per door in positive cash flow. I think it will be a little lower than 100 if I were to factor in vacancy factor and capex. 

I appreciate if you could let me know your thoughts as I am in the 10 day wait period and can pull it off if this is going to make me spend out of pocket.

Thanks in advance.