All Forum Posts by: Jordan B.

Originally posted by @Account Closed:

Oops, you forgot to educate yourself about cap rates. Cap rates are not appropriate for under 5 unit residential or really any property type where there is not a source of reliable cap rate comps. It is also the measure of what the markrt is paying for NOI. it is not a profit metric.

 Thank you Bob. I guess I was referring to the 2% rule. 

I have always been interested in real estate since I was a kid. Family members have always had rental properties growing up and I am familiar with the pro's and con's. Recently within the last 6 months I have taken additional steps to educate myself on entering this business venture. I have been reading a lot of books, listing to podcasts and getting to know my farming area better. I am also starting my real estate classes at the end of this month in order to get my license. 

The deal in question is a Duplex and it is currently being rented out. One tenant is month to month and the others lease ends in April 2015. Here are some details

Asking Price: $170,000

Rent Unit 1: $950

Rent Unit 2: $850

Property Taxes: $3,890

Current Cap Rate: 1.05%

Revenues: $21,600

Expenses: $1260

(Trash: $800)

(Sewage: $460)

I will most likely be going with an FHA loan with a co-signer. I am hoping at setting on a $150,000 purchase price and I feel each unit has potential to get $1,000 per month in rent.

Potential Cap Rate would be 1.3%. Tenants pay all utilities except for sewage and trash. I will manage the property myself. 

Is there anything else i may be missing here? thoughts?

What is your current residence like? Would you consider moving into this FLIP for the time being?  

I got them email on my phone. I'll reach out to you tomorrow. Looking forward to talking with you.

Hey Charles, absolutely. I tried to message you privately but it wasn't allowing me.

Have you compared the amount of rent you would receive in each location? Bridgeport is close to conshohocken's train stops into philly. That could attract higher quality renters as well as more stable renters. There is a lot to consider between the towns. I am not totally against Norristown . Also, regarding 203k loans. The bank would require you to have a licensed contractor perform the renovations. You wouldn't be allowed to do them yourself. Something else to consider. I have been looking into those myself. Best case scenerio would be to have an investor to work with.

Have you compared the amount of rent you would receive in each location? Bridgeport is close to conshohocken's train stops into philly. That could attract higher quality renters as well as more stable renters. There is a lot to consider between the towns. I am not totally against Norristown .

Norristown is in need of some help. Pottstown as well. I am just getting started to. I am actually starting classes online at Montgomery county to get my license soon. The thing about Norristown is the quality of renters. Bridgeport may be a better option.