All Forum Posts by: John R.

Again, thanks everyone for taking the time to comment. Your guidance is welcome and very much appreciated. Updated information from the agent indicates that property has gas heat and the tenants pay both heat and electric.

The agent indicated that she was going to see if the owner has separate expenses available for this property on a Schedule.

Best,
John

Thanks Everyone!!

How much should the potential to subdivide this property come into play regarding my evaluation?

John

Greetings All,

I am evaluating a property to purchase as a rental. It is located in a suburb of Philadelphia, PA and is listed at $114,900. It has been on the market for 186 days and is a double lot that is supposed to be subdividable. The seller is describe as motivated. The first floor is one unit; is a 2/1 and is currently rented through 2/28/2014 at $675/month. The second and third floors make up the second unit, which is a 3/1 and is rented through 1/14/2014 at $870/month. It is described as VERY easy to rent with new carpeting and paint. There is a one car garage that is separately rented at $75/month.

The MLS report indicates the following:

RE Taxes last year = $4,049
Gross Annual Inc = $17,040
Total Annual Exp = $4,049 (Is this the taxes? Seems weird that it is te same exact number. If this is the taxes, then what about OTHER expenses?)

Net Operating Inc = $12,991
Gross Rent Mult = 6.74
Cap Rate = 11.31

I have no doubt that I am just getting started with my analysis; what else do I need to look at, research and learn?

I am working on comps for the area, but wonder why this property has been on the market for so long?

Thanks in advance!!
John

Bring it!!!!

I would like to get involved in real estate investing and am giving serious consideration to purchase, rehab and resell scenarios. Although, it is hard to ignore (or so it seems) the idea of doing some bird-dogging or wholesaling to get used to the industry and learn. I have absolutely no experience, except regarding purchasing a couple of homes, over the years, to live in. Should I create a formal business entity BEFORE I do anything?