All Forum Posts by: Joseph Garner

Just testing my numbers and what an offer should look like. Any feedback/input is appreciated!! (Keep in mind this is just a made up deal)

Asking price: $700,000 for 10 units

Area has 9% cap rate

Monthly rent is $675/month per unit

Yearly insurance $ 4800/year

Taxes $7800/year

Snow/grass removal $1800/year

Electrical for common areas $1080/year

Water/sewage/trash $8200

————————————————————

Income - $81000

Expenses- $23680

NOI- $57320

Offer price- NOI/Cap rate = $636,888

Is there anything else I should be figuring into it the expenses, IE. Vacancy, cap ex, repairs, property management, etc. In my head, no. Because someone could say my property management cost 12%, which could effect the NOI. But I could be wrong.

@Tyler D'Alessandro

First off, I’m a little confused. To clarify, you have 8 total units being 1BR/1BA?

I say the simple solutions would be to have a fix rate for the electrical in the tenants rent. Instead of rent being $450 with all utilities paid by owner, rent could be $485 with all utilities paid by owner.

$450x8=$3600

$485x8=$3880

Most tenants are used to paying own utilities, however some may enjoy just paying you for everything rather than have 3 different more bills coming in.

Best regards,

@Robert Collins

@a 8% cap rate with current numbers from what I’ve seen on your calculator. $270k. Gives you room to grow, and increase rents.

@Robert Collins

Based on the numbers (crazy low cap rate, maybe ask a local agent/broker what cap rates in that area are) that’s what it is worth. But at the same time I can make any $200k property appear to be worth $350k by skewing numbers.

Have you done more digging then what they have shown you on an MLS site?

IE. Actual rents and renters in place, past years rent rolls, documents on expenses.

@Etai Gil

So did he take out a conventional loan on a unit bigger then a 4 plex?

I guess I’ve always seen/heard/read that you need a commercial loan once you get into the 8+units.

@Curtis Rouse Jr

You have to start somewhere! That’s really cool, and great job on being persistent, I feel a lot of investors stop before they even become vested due to being told no.

I’ll have to really have a good talk track/plan. As I will most likely be doing a cash out re-fi for the most part.

I appreciate all your insight, and best regards going forward.

:)

@Curtis Rouse Jr

Thank you for the info, I have emailed some. I better just make a list, and call 2-3 a day and try to form a relationship.

What did you “bring to the plate” so that banks took you serious?

Hi guys,

It’s been awhile since I’ve been on the BP app. Being said that I’ve been busy educating myself, and acquiring a couple duplexes.

In the past month or so I’ve been really interested in the multi family outlook (just like everyone else). I’ve been going over deals every day to better understand (for the most point) what is/isn’t worth pursuing.

A really good deal came up, when acquiring on it I was told it already had 2 offers on it. I unfortunately didn’t have finances in place to possibly put in an offer/back up offer. The owner of the company I work for has agreed if on a good deal, he will back me with up to $250k for a certain amount of time. Some of the deals I would be able to pay out right for cash.

Long shorty short, I’m looking for where I need to go, call, do so I can get a commercial loan, so I can pay back the $250k loan. I am doing my business in Indiana, so does it have to be state specific? Can any one point me in the right direction?

@Russell Brazil Thanks for the insight. After looking more into it and talking to my lender, you nailed it right on the head.

Hey BP community! I am in the process of buying my first property! It’s two SFH that I can’t wait to get rented! However, I’m hung up on closing costs. What is a typical percentage I should be charged? Currently the numbers my lender has shown me is suggesting about 8%.