All Forum Posts by: Katrina P.

It's in Michigan. A good area...college town. Stays perpetually rented. 

Hi guys,

So I am analyzing a 6-unit.  Please let me know your thoughts.  Personally, I'm not crazy about it.  Details below:

Purchase Price:  $124,900

Contains (5) 2-bedrooms and (1) 1 bedroom

Rents: $3,490 totally rented out

Water/sewer: $100/mo

Garbage:  $213/mo

Pest Control:  $68/mo

Taxes:  $450/mo

Insurance:  $250/mo

Property Mgt:  $279/mo

Lawncare:  $100/mo

10% Maintenance:  $349

5% Vacancy (low vacancy area historically):  $174.50

Total Expenses:  $1983.50

Financing:  Bank (80% note):  $830 (15-year term); Seller (10% note):  $99.  Still deciding what I'm going to do about the last 10%...whether I'lll do cash, another loan or combination of both.

No known deferred maintenance, but will have inspection done.

So what say you, BP?  Yea or nah???

Yea, definitely try Lending Club or Prosper. They'll loan up to $35k.

Home price is actually $135k. The approximate loan size is $128k, after factoring closing costs and my down payment. After the 5 years, the loan will reset until it's paid off. I'm paying utilities because they aren't separated it's currently cost prohibitive to separate. I don't understand your numbers. I've done mine and compared them to the seller's Schedule E.

okay,will do! Thanks for the input!

Yea, can't get around the balloon, unfortunately. And guess I should include another 10% for vacancies. Thanks for the input! 

I am dealing with very small credit unions that are willing to do some creative financing. The units are also in good shape -- no deferred maintenance. Just a little updating t turnovers. I admit this is a unique situation. Also, I will be managing myself. I manage all my properties. Also, I have the reserves, so that isn't a concern. Thanks for your input! 

Hi Everyone,

I don't know why I always get nervous when it's time to pull the trigger...several years and purchases into this thing. Anyways, please take a look at the numbers for my newest deals I plan to close within the next 6 weeks (I'm new to multifamily, so that may also be why I'm nervous). Let me know if I'm missing something, if they're great deals, or If I need to start over! lol Still building my confidence!

8-unit

Purchase price: $135k

Rents (currently 100% rented): $3830/mo

Tenants pay their own electric

Gas: $210/mo

Water/sewer: $250/mo

Taxes: $325/mo

Insurance: $278/mo (still shopping around for insurance, but this amount includes general liability for $2m at $706/year)

Garbage: $80/mo

Lawn care/snow removal: $235/mo

Total expenses: $1250

Financing:

Bank Loan: $128k, 5.75% interest, 15-year amortization, 5 year balloon, $1065/mo pymt

Down payment: $10k

So, $3830 - $383 (10% maintenance) - $1250 (monthly expenses) - $1065 (mortgage) = $1132/mo cashflow.

-----------------------------------------

(2) 3-units

Package Purchase price: $75k

Rents: $2800/mo (5/6 units are currently rented. There is an office space that is empty that I will rent for $400).

Electric: $213/mo

Gas: $255/mo

Water/sewer/trash: $169/mo

Taxes: $201/mo

Insurance: $100/mo

Lawn care/snow removal: $100/mo

Total expenses: $1038

Financing:

Bank Loan: $56,250, 5.75% interest, 15-year amortization, 5 year balloon, $467/mo pymt

Seller Note: $15k (20%), 5% interest, 10-year amortization, $159/mo

Down payment: $3,750

So, $2800 - $280 (10% maintenance) - $1038 (monthly expenses) - $626 (mortgage) = $856/mo cashflow as currently rented. Once I rent the office space, this should increase revenue by $400, so to be conservative, cashflow should increase by $200 once I rent the space.

Have I missed anything at all with these evaluations? Thoughts/input/suggestions??? All are welcome!!

Thanks so much!

Great story!  Congrats!!

Those numbers sound plain ridiculous to me :-\.  Try mid-west...just about anywhere.  Much higher returns!