Hello Bigger Pockets,
I am about to pull the trigger on my initial offer and would like some feedback on multiple points of my offer before I do. (i.e. financials, analysis, CMA, rent rates, legal etc). It is a 4 plex within city limits. Built in 2009, 3/2 units with driveways, granite counters, tile in common areas new carpet in rooms, fresh paint, all appliances stay including W/D in each unit. Listing price is $185,000, CMA revealed 4 identical 4plexes that closed for this price in the last 1.5 years. Average rent in this area is $750. Currently all units are vacant. A few other identical properties have a current vacancy listed at $695. At first glance, all I have to do is change all the locks and tenants can move in (after initial walk through, actual inspection to follow $600).
The financing will be 30 year FHA with 3.5% down. According to my closing cost estimations it will be just under $11,000 if I close on 1st of April. Annual taxes approximately $2,500. RCV insurance premiums (including Hail/wind and storm) will run anywhere from $5,708 to $7000 depending on deductibles. It is not in a flood zone.
NOI: $17,200; EGI: $32,100 Vacancy Rate: 5% Cap Rate: 9.3% - 10.38% GRM: 5.47 GIM: 5.76 NIM: 10.76 After Tax IRR: 42.87
My intent is to purchase this in my name, create a land trust, deed it to land trust with myself as the beneficiary, and the land trust will be owned by my MS LLC, after 1 year of ownership. Strategy: buy and hold.
Any thoughts, questions, or advice is much appreciated. And yes I plan on living in one unit for >1yr.
To get to this point, I have ran the numbers on about 74 properties made 1 other offer over the last 3 months with currently no rental properties in my portfolio.
Newbie,
Jason
