All Forum Posts by: Thomas Fosnaugh

Thanks Joel I did do that backwards. I just listened to your podcast last night (small world - I work overnights as a pharmacist at Walgreens) and thought it was full of great information by the way.

The listing agent provided the following info which doesn't make any sense to me.

Gross Income: $28,080 (divides out to $585/month/unit)

Rent Listed in their current ad online to rent unit is $545/month though with a $300 deposit?

Total Expenses: $8,734

NOI: $17,380

Vacancy Rate: 6% (agent said to use 10% to be safe for this market)

My calculations

Income: $26,352 (@ $549/unit)

Expense: $15,811.20

NOI: $10,540

Comparable properties in the area rent for $500-800 in the area, water and/or other utilities seem to be included in some combination in most other rentals locally.

And I looked up the assessment/tax info again (appears to be listed per unit with county)

Assessed value: $32,147 per unit x 4 = $128,588 total

Net tax: $642 x4 units $2568

We are seeing the properties today so I'm hoping to verify some of the actual numbers. Thanks for the advice about other landlords/current tenants - I really appreciate your post/podcast.

Looking at a set of #4 four plexes built 1980 in Marion, IA - each unit is a 2 bed 1 bath 700-800 square feet. Here's the numbers.

Rent: $549 per month per unit (their numbers say $585 I think they include coin laundry) - $26,352 annual

Expenses: $11,200 total annual (I factored 60% off gross because landlord pays water/trash)

Taxes - $2568 annually

NO I - $15,152

List Price: $145,000 (per four plex)

Cap Rate: 10.4

Located in a desirable neighborhood/great school district surrounded by newer single family houses/condos.

I have the capacity to buy #3 or maybe all 4 of the four plexes depending on deal I can get (15-20 % down, 4-5% interest rate on conventional 30 yr. Loans mortgage payment on each $640/month). I'd be looking at around $620 cash flow/month per 4 plex (@ list purchase price).

Thanks for reading - any advice/ideas is greatly appreciated.

Thanks guys. For purchase price we looked at comps on sold properties and 1 percent rent bare minimum to offer price + rehab money (hardwood refinishing, paint, appliances, some new fixtures to get 900-1100 per month rent in future then basement finishing to get 1100 -1300 rent. 2 percent deals here are rare/would put you in challenging neighborhoods and I have a couple kids to worry about for our primary residence. We should end up around 1.25 - 1.5 percent rent to value range ultimately.

Place was initially listed for 78,000, pended right away and then came back on luckily. We started a little lower but there were multiple offers and most homepath foreclosures here sell for a little over list price.

After making several unsuccessful offers on other properties over the last several weeks and driving our realtor crazy with low offers, we just got our first deal!

It's a homepath foreclosure 2 BR, 2 Bath ranch single family home with a partially finished basement and 2 1/2 car detached garage in Marion, Iowa (1100 square feet with around 400 square feet in the basement). Great looking wood floors that were previously covered with carpet, tile in bathroom and kitchen, crown molding/plaster walls, newer windows and roof. Backyard backs up to the local middle school playground. Really just needs some paint, appliances, and some cosmetics.

They accepted our offer price of $80,000 (will have to put 5% down) - 2014 tax assessment is at $115,000, could probably sell it tomorrow as is for $100,000 - 105,000. Our plan is to move in for a year, sell our current home with about $85,000 - $95,000 equity and start buying some more rentals. We may move or stay after a year - we could rent the place now for $900/month and could probably get $1000 - 1200/month if we finish the rest of the basement and do some cosmetic rehab.

I just came across BP a few months ago and would never have done this deal, with these numbers, against our realtor's suggestions on offer price without the information and encouragement on the forums and in the podcasts - Thank you!

Looking at a deal on a duplex that I would owner occupy - there are very few multifamily properties available in my area currently and all seem to have what I think are inflated list prices.

1,976 sq. ft. 2 bed, 2 bath per unit duplex built in 1969, 2 car garage.

List Price $137,750

Current Tax Assessed Value $100,800 (prev. $116,000 average)

Located in a desirable neighborhood with SFH and MFH mix close to an elementary school.

Gross Income $14,400 annually (verified currently getting $600 per side rent). Their listed expenses $3150 annually - $3400 annual expenses calculated based on 50% rule.

Taxes - $1600 per year, Insurance $725 per year

Mortgage - 5% down payment at 4.25%, closing costs around $900.

$80,000 - 100,000 equity in current primary residence.

Current tenants month to month, looking to leave. I have prescreened a great tenant who I would feel more than comfortable living next to (currently babysits my kids).

Property has worn roof, outdated/damaged siding on both garage and house and needs a new front door. Previously had sewer backup issues, but were supposedly resolved and new flooring in lower unit installed.

Max rent for comps in area $800 per unit per month.

Offered $109,000 - seller rejected, seems to be moderate amount of interest in property - has been listed about 6 months.

Recommendations on purchase price? Should I go up a little bit or run away and wait?

Located in Eastern Iowa, I appreciate any feedback!