All Forum Posts by: Thiyaga Rajan

If I'm reading you correctly, you are saying you are buying a multi-family property that after all expenses with 25% down is going to cash-flow $300/month. I would have to tell you up front this doesn't look like a great deal. Yes, it is cash-flowing... so that part is somewhat positive... but how much it is cash flowing for a multi-family property is not good (in my book)! We don't know how many units you are talking about... but $300/month is about the minimum I want to cash flow PER DOOR on a property. So on a Duplex, I would want to net $600, and a triplex, closer to $900. We don't have insight into all your numbers... but I would be somewhat concerned.

To put that in perspective... you are spending $120,000 (at 25% down) to net $3,600 / year If I am reading you correctly. That is a cash on cash return of 3% a year. High interest savings accounts (with no tenants, no clogged toilets, no roof leaks, no broken "whatever") are paying 5% right now. I would stop where you are at and re-evaluate my situation if everything I am assuming is correct.

Next question: Did you account for how your property taxes will change after they reset? The property taxes at the time you close are the previous buyer's property tax rate. YOUR tax rate will be based on what YOU paid for the property... which is almost always MORE than what the last person paid. This new tax rate may take your slim positive cash flow and turn it into a negative cash flow very quickly. So before you even get to the question of buying a second property, I would make sure you want to actually buy the first one!

Hope everything works out!

Randy

Really appreciate your insights. This Multi family is 5 units and is located right next to university and downtown and hence literally no vacancy and bigger scope for appreciation and can be setup as LTR(currently it is) and MTR. My problem is the 6.5% commercial loan with amortizing over 20 years. Agreed it builds a nice equity but high interest rate and amortization period thins the cash flow.

Also because of the high interest rate able to at least offer for properties and also have a fear of not losing out like 2021/2022 when I was outbid even before I can approach a contact for sale.

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Hello BP community, need your thoughts. Getting a Multi family for 475K and the expenses including PM comes to around $1200 and will have around $3300 left. Reserving 10% for maintenance, I would be able to have $2900 finally. The commercial mortgage comes to around $2600 for 5 year term ammortized over 20 years with balloon for now after 5 years. I can either 120K (25%) and get the rest as loan which will leave a very thin margin of about $300 every month. However with another 50K I have an option to pursue another triplex and still do not have information on rent roll and expenses on that.

What is the suggestion? Go for another property and ignore the cash flow on the 1st property or focus on cash flow on the 1st property?

If I put the minimum 25% on 1st property I would be able to close the 2nd property but would not be able to cash flow on both and both Multi family units are in great location and have good appreciation scope. Please advise.

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Appreciate all the reply. Kindly confirm if the location of locust RD Ocala is safe to be considered for a purchase.

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Jacksonville, Florida

Is investing now in Ocala better than Jacksonville? Looking for a property in Ocala in zip code 34472 and kindly advice if that area is good.

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Jacksonville, Florida

All Forum Posts by: Thiyaga Rajan

Thiyaga Rajan has started 6 posts and replied 14 times.

Post: Suggestion on how much to invest

Post: Suggestion on how much to invest

Post: Investing in Ocala

Post: Investing in Ocala