All Forum Posts by: Account Closed

I have been investing in real estate since 2005 and at my peak had 6 SFR/duplexes. I moved to Sioux Falls last year and now would like to take my investing to the next level by investing in larger multi-family units. I am seeking an experienced mentor with 4+ unit properties that could help me review some potential deals and share insight on putting deals together with partners. I need the first hand knowledge to help me get over the edge and start expanding my portfolio. If there is someone willing to spend a little time with me in the Sioux Falls area that would be great but I would be willing to have a mentee relationship with anyone that is experienced in the multi-family arena. I have 14+ years in the mortgage area with an emphasis in default so I would not need hand holding. Thanks for your time.

Thanks. Is there a cash on cash return that either of you have to have as a minimum?

Fellow investors,

I created a spreadsheet to help calculate ratios and determine if a property is a good investment. I believe that some of my assumptions are very conservative and may have led me to pass on some acceptable investments. I wanted to run this by some of the experts to see if my calculations are in deed conservative or if I just haven't found an acceptable property. I am using 10% vacancy, 10% annual repairs, and 10% property management. The size unit I was applying this to was a 16 plex. Using these numbers the CAP rate was 8.6% and the annual net cash flow was $13,000. The property was listed at 550,000 and I would have been putting 20% down making my cash on cash return around 11.5%.

I have read in the past to look at $100 per unit per month in positive cash flow.  This property would have failed that test unless investors are more aggressive in their assumptions around vacancy and repairs.

Any wisdom someone could share with me would be appreciated.

Thank you.