All Forum Posts by: Daniel Jordan

I haven't done the drive-by yet, but the exterior is brick and appears to be in good shape. According to the listing (take it for what its worth) the units are currently rented for $500. It had a new roof put on in 2012 (very plausable as we had a big hail strom that did a lot of damage, and furnaces replaced in 3 of the units in 2005. And, to top all of that off, I searched the internet looking for addtional photos and the asking price has been reduced on the actual realators webpage to $130K. Either the sellers really want out, or the inside must need a lot of work.

Looking in my area for a good investment deal to start out with. It appears that there are several 4-plexes running for around $150k that have been on the market for 6 months or better.

These are 2-bed 1-bath, and should bring $500 per month.

Purchase price: $140,000
Closing Costs: $5,000
Downpayment: $28,000
Loan amount: $112,000
Rate: 5%
Term: 30 years
Payment: $601
50% of rents: $1,000
Cash flow: $399
Cash flow/unit $99.75
Yearly cash flow: $4,788
Cash on cash return: 14.5%

Asumming I can negotiate for a $140K purchase, using the quick and dirty 50% rule that would leave $1,000 to service the mortgage payment with $399 cash flow or $99.75 per unit. All the above looks good and reasonable to me. Am I missing something? Why wouldn't these have been purchased already? I should mention that they not located in horrible areas, but they are in lower income areas.

Any insight is greatly appreciated.

Hoping to draw from the experience from others here. I have purchased a house that I am renovating to rent. The house is sound and in a good area. 3 beds 1 bath comparable to the area. The one thing I am concerned with is the size of the closets they will be 24" x 34". I am contemplating making them floor to ceiling with bifold doors, to take advantage of all the space I can. Has anyone done this or seen it done? Will it help or just draw attention to the small closets? Anyone have any other suggestions? Would it hurt the marketability of the home if I were to sell. Thanks in advance for all of your wisdom.