All Forum Posts by: Steven OMahoney

@Denny Robert I am open to Phoenix, Scottsdale, Temp, Chandler, Mesa, maybe Gilbert. As I mentioned, this would be my first property and I am learning as I go. I've read quite a bit but it's never the same as actually going trough the motions. 

Thank you all for your replies. I have read them but have been a bit busy with military to reply. Some short specifics, before I reply individually. The HOA does take care of water, sewer and trash. With this comes a pool and a small, extremely small, gym as well. They do have covered parking but looking over the entire property, it does not look well maintained, at all. The buildings look worn down and I just get an overall feeling of lack of ownership of the property. After reading a few of these extremely helpful replies, I pulled my offer out.

@Denny Robert thank you for the valuable advice and knowledge. knowing your paying $300+/- for your 4plex really confirmed my assumptions of their HOA as well as looking into their specifics.

@Tim Winter I had put an offer in of $175,000 which was returned with $180,000. The data is all proforma, with no expenditure/rent roll verification yet. The property It is a 4plex. 

@Kevin Hunter I think I am going to follow this baseline of thinking, when I find a property that suits my needs. the first property I will purchase with the VA loan and live in it, for the time being.

Overall, thank you all for your comments. It may not seem like it but they were really important in my decision making and ability to analyze this property. It made me investigate avenues that I never would have thought about, which ultimately saved me heartache and pain should I have moved forward with my offer. In the end, as I stated, I removed my offer and will continue to look throughout the phoenix and surrounding cities for a different Multifamily property. 

@Christian Bors, Thanks for the feed back. Yes, I meant to put conventional loan instead of FHA. I was researching FHA loans right before posting and for some reason that acronym stuck in my head while typing.

I am very on the fence, as the HOA fee is a lot larger, or so it seems, but it may be because this is my first deal and other properties do not have HOA associated with them.

Overall, would you keep cash in pocket and take a smaller ROI or put the money down and take a bigger slice of the pie monthly? I do plan on purchasing more REI after my first.

Hello All,

I am looking at purchasing my first Multi family 4 Plex located in Phoenix and would like a little guidance / mentoring on the specifics and options that I have.

The property and my offering:

Asking Price: $189,000    My offer: $175,000

Gross Rents (4 units): $2485 per month (Plan on raising to $750 across the board)

All 2 bed 2 bath: $595, $620, $620, $650

Expenses:
Taxes: $91.00
Insurance: ~$98.00
Vacancy (10%): $250.00 (estimating 10%) 
Repairs (8%): $205.50
HOA - (22%) $555.00 ($139.00/unit - pays water & trash removal)
PM (7.5%): $189.00

Total: - $1,388.00

Mortgage:

$709 (FHA with 20% down and fixed 4.5%)

$886 (VA 0% down and fixed 4.5%) upside, I keep my $35,000 I have set aside for down payment for either another property down the road or upgrades to this property.

NOI: $2485 - 1388 = $1097

Cash Flow: $1097 - $886 = $211 per month (8.5% ROI) with VA loan

Cash Flow: $1097 - $709 = $388 per month (12.5% ROI) with FHA and 20% down

I feel like the HOA fee alone kills this deal for me but I'm new and motivated and want to get something going in terms of REI. I'm not an overzealous person, but maybe a bit antsy after reading and searching for a few months and wanting to get trigger happy sooner rather than later.

Does one way or the next make this a better deal, other than ROI? Should I be looking at something else that's not mentioned in my post?

Any pair of eyes and thoughts are welcome!

Steven  

Hello Everyone, 

My name is Steven, I am 33 and looking to purchase my first multi family investment within 6-9 months, maybe sooner. I'm here to connect with others/gain a mentor within the Phoenix and surrounding areas. I am new to real estate and looking to soak up as much information as possible before jumping into a property purchase. 

Anyone out there looking to pass down some advice for a new comer, all is welcome!

Best,Steven

Would love to attend, as I am new to the real estate game, but unfortunately I will be in Tucson for the week & weekend.