All Forum Posts by: Ryan Mattson

Hi All, here's a potential deal I would love some opinions on considering a fundamental decision must be made for it to be viable.

Triplex currently listed at $127k

Down Payment: $31,750

Gross Monthly Rent: $1,500 (500 each)

Estimated Expenses:

Mortgage: $500

Property Tax: $80

Property Management: (10%) $150

Water + Trash: $150

Repairs (5%) $75

Capital Expense (10%) $150

Vacancy (5%) $75

Total: $1,180 Monthly

Cash on Cash return: $3,840 (About 12% return on investment)

Property was built in the 1930's and states "could be rented for higher with work/repairs" 

Average comp rents seem to be around $600-700

If I could rent each unit for $600, updated ROI could be up to around 20%...

Is this a deal worth pursuing?

Thanks!

Hi All, 

We have yet to close on our first deal, and I am being very cautious when it comes to our first purchase. That being said, I've found a 4-Plex currently listed at $290k, all with 3 Bed/1 Bath units. (Each one has 1100 Sq. Ft.) I requested information from my realtor about the rent rolls expecting them to be in the $900-$1000 range, but found out each one is currently rented for $700 per month in a non rent-controlled area. I understand we are currently in a seller's market and the owner is surely trying to get top dollar for their property, but that still leaves the question as to why the rents are noticeably lower than market for that area. Any opinions? Thanks!

-Ryan

@Sebby Gabre Madhin Thank you so much for the insight, I've been attempting to run some more in-depth numbers using information that I've gathered myself. It's difficult to accurately gauge the condition of the units and property as a whole however because my realtor informed me that an offer must be made in order to find out those crucial details and request that information from the seller; doesn't really make sense to me as this information could make or break the deal in terms of cash ROI. How am I supposed to know the value of the property and how much to offer if I don't know it's condition?

@Hunter Locke Thanks so much! It's nice to have everything laid out so nice and properly

Hi Everyone, I'm currently working with my father who is trying to close on his first real estate deal. He is not the most financially savvy and I've found myself in a make-shift financial adviser sort of position, but I feel this would be a good opportunity for me to learn the business and benefit him as well. Anyway, after much delay and shopping, we finally have our financing in place and can make an offer if a good opportunity arises. So here's my question: Is this a good deal?

Duplex and detached Studio Unit - Total of 3 Units - currently priced at $170k

Following information provided by my realtor:

Total gross rent: $1,800

Annual Income $19400 (Buyer to verify)
Annual Expense $4500 (Buyer to verify)
Income (before mortgage expense) $14,900 (Buyer to verify)

Tenant Pays All Utilities, Water, Sewer
Income Includes Unit Rent
(Expenses Include Management, Maintenance/Repair, Insurance, Taxes, Vacancy Factor) - According to seller

Our lender wants us to put down 25% - Around $43k

Mortgage payment would be around $700, bringing our net income to around $6,500 

If I'm correct this would be a cash ROI of around 15%?

At first glance these numbers seem solid, but there is also some factors that are discouraging as a potential investor. 

#1: The listing only has one photo of the property. All units are currently occupied, but still... 1 photo.

#2: The listing has been up since August 2017 - Any and all potential buyers walked off after inspection?

As a virgin investor, I would really appreciate any and all feedback!

Thanks!

@Aaron Mazzrillo Thank you for all the knowledge, you're absolutely right, I can't blame circumstances as a reason for my own shortcomings. Do you have any advice as to approaching private lenders with deals for someone who hasn't yet closed a deal? 

@Aaron Mazzrillo Hi Aaron, I really appreciated the input you gave regarding what to avoid and how to succeed. As a fellow Californian, I'm sure you're aware of the current local housing markets, and how difficult they can be to get into if you don't have quite a bit of capital up front, or someone you know who does. Is there any specific reasons or bad experiences you've had investing out of state? Thank you so much for your time!

-Ryan

@Cody Evans We're more alike than you think man. My girl thinks I'm too young to be buying houses, but luckily my dad believes in me lol. What did you get a degree in? Anything real estate related?

@Michael Minor Thank you so much for your service to our country. House hacking using an FHA sounds very enticing...

@Michael Minor Very inspirational, one day I hope to match the success that you've achieved. At 20 years old, did you receive a mortgage for the $90k property on your own?