All Forum Posts by: John G.

What type of numbers would it take for you to invest in a multifamily.  I am trying to figure that out myself.

What do other people consider profitable as a multifamily house.  Just cash flow? Lots of appreciation?  I am currently searching for a multi-family way up north here.  At this point its mostly retail.   Around me there are not very many multi-family houses on the market.  The few that are have been sitting for a while.

I don't mean to hijack someone's discussion but didn't know how to reply and start a different one.

Thanks for asking that question.  I was just going to start a discussion on the same thing.  I am looking at buying a triplex with $580 cash flow after mortgage and expenses.  But, I know that the property will probably not appreciate much over time as I would be buying it for 95k which is more of a retail price.  So I am right with you trying to search for answers.  From what I have found you got some good feedback on here.  I was also told there is no right investment...it has to work for you and your investment goals.

Wish you all the luck!

That's a pretty comical story indeed.  I thought I had heard it all when a tenant told me to rush over and change a light bulb.  I said. "what?"  They were convinced that was my job as the owner/ landlord to do.  I told them to go buy some light bulbs and take care of it in a nice tone of course.

Some tenants think we are running full service hotels or something.  Quite comical.

Hey I really appreciate the input.  You have a lot of valid points, some of which I didn't think about.

You are right, in the end its up to me whether or not it works for me or not.  I'm probably ok if I need to rent out 1 or 2 of the units if they decide to leave.  I have enough squirreled away from my other rentals to get by on the mortgage.

I have just been hesitant to purchase a property for so much more than my other rentals that are yielding more cash flow because they were paid off sooner.

The cash flow isn't bad on this house....but I didn't want to buy a house based just on cash flow.  As so many people talk about buying wholesale and renting so you have more equity.

I can't find any wholesale or distressed...they are getting hard to find. 

Hi,

 I have never bought a rental property retaiI.  I have always bought my rentals as forclosures or distressed properties and fixed them up myself and rented them. 

 This time a round I found a triplex that is all fixed up and fully rented. I am having a hard time justifying paying double what I have in the past because its all fixed up. (I think my purchase price 95K is still in the -retail realm.

I don't think this property is going to gain a lot in value over the years as these multifamily properties around here just don't sell fast at all.  Is the cash flow enough to warrant such a purchase. 

The details:

Triplex, 2br 675, 2 br 575, 1br 400

negotiated purchase price 95k. Rents for $1650/mo. operating expenses $542/mo (figured high). Mortgage expense $527/mo.

Its an 1898 old home but fixed up fairly nice.

Came up with $580 of cashflow (after mortgage payment), 13% cap rate, cash on cash ROI of 22.66%. I just don't know what type of numbers I should be looking for when buying a ready-to-go retail property.

Any help on this one would be greatly appreciated.

John

Man, Minnesota redemption period sucks!  Its 6mos equitable redemption and 6 months statutory redemption.

When you buy a property at sheriffs sale you can't do anything with it until the last half redemption period ends (6 months). One con is that you have to pay cash (or could use HELOC I suppose) at the sale and your money is tied up for 6 months. In that time the homeowner could still get it back but very unlikely. If they had their loan paid down to the point to where you can buy at sheriffs sale for a really really good price might be worth it. (all you have to bid is $1 over the bank and its yours).

I guess every state can be different I am speaking from what I know about Minnesota.

I personally don't like having cash tied up like that. 

Hi,

I'm new to these forums and found it when I was searching and researching the question I'm asking.

I have always bought my rentals as forclosures or distressed properties and fixed them up myself and rented them (only 5 yrs experience)  This time a round I found a triplex that is all fixed up and fully rented.  I am having a hard time justifying paying double what I have in the past because its all fixed up.  (I think my purchase price 95K is still in the wholesale-retail realm.

The details:

negotiated purchase price 95k.  Rents for $1650/mo. operating expenses $542/mo (figured high). Mortgage expense $527/mo.

Its an 1898 old home but fixed up fairly nice.

I used the calculator from this website which came up with $580 of cashflow (after mortgage payment), 13% cap rate, cash on cash ROI of 22.66%. I just don't know what type of numbers I should be looking for when buying a ready-to-go property.

The numbers will be scewed a little bit as I would be using HELOC for my down payment on a 15yr 4% Conv. loan. I do own other properties so I could get a business loan too.

I'm lost where to go next or just jump in like I did on my other properties.

I look forward to utilizing this web forum as I gain experience to help others.

Any help on this one would be greatly appreciated.

John