All Forum Posts by: Sarah McCluskey

@Mark H. Porter are you saying that you would offer much lower than I’m currently analyzing it at so that the cash flow was higher from the start?

@Theresa Harris the cash flow would be $155 total for the duplex now, but ideally $900 total for the duplex once the rents were at in line with the market.

The rent for each unit is currently $850 and $900 per month, but based on the area, should be $1300/ month per unit. I know it’s not realistic to bump them up that much overnight, so I’m trying to figure out if the future potential is worth the initial low cash on cash return and low cash flow.

@Alex Heidenreich cash flow at current rents would be $155/month, so less than $100/door. But at market rate would be $900/month total, $450/door.

Normally I wouldn’t consider a property under $200/door. But the potential here is really enticing. But I just don’t know if it’s a smart move to buy for the future, not for the now.

@Alex Heidenreich thanks for your reply! One unit the tenant has been there for 8 years and is on month to month. I haven’t seen inside pictures. The other unit the lease expires in December - 1st year the tenant has been there.

Would you bump them up slowly year over year or do a market adjustment to the current rent rates?

I found an off market deal that is just slightly below the market rate, so I wouldn’t walk in with much equity. Both units are currently rented out, and at the current rents, the property would have positive cash flow, but minimal.

However, the current rents are around $300 each for a duplex, so $600/month below market rent rate for the area.

My question is - would you buy a property that off the bat would have low cash flow, but once rents were where they should be would have great cash flow?