All Forum Posts by: Justin Howe

@Matt Morgan, that makes total sense. Thanks for running the numbers in your spreadsheet. I agree that property taxes seem low, but that's what I found on Zillow. I also agree that 8% is too low because I think we can better returns in the stock market.

What kind of returns do you see in the midwest and how do you mitigate risks when investing out of state?

I recalculated the numbers with 10% vacancy and 10% PM fee. Here's what I got.

Income: $25,920
Expenses: $21,756
Monthly Cash Flow: $347

I've heard most investors try to get $100 per door but I'm calculating $86.75 per door on this deal.

The seller's asking price is $194,000 and they bought it for $160,000 in 2012.

What would you offer on this property?

@Kyle I don't want to use FHA because I don't want to pay PMI for the life of the loan. That's why I would prefer to do a conventional loan with 20% down. I will ask the seller about the roof, water heater, ect and I will re-run the numbers to account for higher management fee and vacancy.

@Matt Thank you for the insight regarding cap rates in the Phoenix market. I'd like to invest locally but I noticed you are an investor in AZ as well. Are you investing out of state? If so, which markets are you investing in?

@Ciprian I'll recalculate the numbers with 10% vacancy

(the @ doesn't work on my work computer)

Hi @Account Closed 

I'm new to this too so correct me if I'm wrong. There are 4 units I guess, each have 2 bedrooms and 1 bathroom.

I also failed to mention in the post that all units are currently rented.

Hey everyone,

I found a 4 plex and want your input on the deal. This will be my first investment property. I own a SFR that is three miles away so it would be easier to self-manage. For calculations, I included management expense but I plan to self manage.

4 plex, 8 units, 2 bed/1 bath, 3200 sq ft

Built in 1979. New flooring and cabinets in 2009

Purchase price: $194,000

Down payment: $40,000

30 year mortgage at 5% - 20% down

Income

Rental income: $25,920

Expenses

Property taxes: $1,000 annually

Insurance: $1,000 annually (guess)

Property management: (6% of rent) $1,560 annually

Maintenance/repairs: (6% or rent) $1,560 annually

Utilities: $2,100 annually (water/trash)

Mortgage: $12,348 annually 

Total Expenses: $19,568 

Net Income: $6,352

Cash flow: $530 monthly

Also should I use my heloc or cash for the down payment?

Thank you for all of your help in advance,

Justin