Real Estate Investor · Jersey City · Member since 2008 · 13 posts · 0 votes
I have found another multi family, 2 units. The house sold in 2005 for 571k the bank is asking 389k. I was just interested to find does this look like a good deal for a long term rental until the market changes. House was built in 2005 and in good condition. Just a little nervous because the rent will just cover the mortgate insurance and taxes I will break even...but if I lose a tenant then I am looking at coming out of my pocket any suggestions?
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
18y
If the rent just covers the PITI, you're looking at coming out of your pocket anyway. Tenant screening, advertising, legal fees, maintenance, property management, etc. Heaven forbid if a tenant has to be evicted and causes a lot of damage in the process. Rent needs to be quite a bit more than PITI to have a profitable investment. This is a bad deal
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
18y
Not so hasty Jon. If Vivian is able to sustain negative cash flow for a period of time and the investment is in an area that she expects to have great recovery/appreciation, she could make a speculation investment. In that case, it may be a great deal.
From a cash flow standpoint, as you stated, it is not a great deal.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
18y
Indeed, there may be other factors. Not much info provided. Cash flow wise, as a rental, its terrible. If its in CA, FL, NV, or some other area that had a huge run up in the bubble, and, IMHO, still has a ways to fall, its bad from a speculative point of view, too.
But, if there's some local driver that will cause prices to increase, and the significant negative cash flow can be handled, then maybe there's a deal here.