Residential Real Estate Agent · Cedar Park, TX · Member since 2009 · 13 posts · 0 votes
2007 model fourplex near Austin TX
3700sf total, all 2bed/2bath units,2 stories, carports
2.85% taxes
HOA $360/mo (community center and pool, workout room, etc)
2 units currently rented for 859 and 979, other two should be about 859 as well (979 unit is partially furnished)
Very nice area, desirable location (schools, employers, etc)
$0 needed in repairs
What is the max price you are willing to pay? Lets assume 20% down.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
16y
OK, start with $859 rent per unit. Renting furniture for $120 a month is a separate business. Taxes in TX are high, and bugs are a problem, but you don't have heating problems or the damage inflicted by harsh winters. Assuming tentants pay all utilities, you should be close to the 50% rule.
OTOH, it sounds like a condo, so HOA fees are always a wild card. Personally, I loathe HOAs. Even when I lived in Houston for many years, which is rife with HOAs, I always avoided them.
So, here's my math:
Rent: $3436
Expenses: $1718 (includes vacancy and capital)
NOI: $1718
Desired cash flow: $400
Left for payment: $1318
Max loan (and price): $219,831.35 (assumes 30 years at 7%)
That's ignoring the down payment. Really, that's another way of saying you're making the same return on the down payment as you're paying on the loan. (If you're willing to invest your cash for zero return, PM me, I'll be glad to help you out. :-))
So, if we put in the down payment of 20%
Down: $43,955.27
Loan: $175,865.08
Actual payment: $1054.40
Cash flow: $663.60/month
Cash flow: $7963.20/year
Cash on cash return: 18%
Real Estate Investor · Fresno, CA · Member since 2009 · 105 posts · 71 votes
16y
I can't speak for the Texas market but in my investment area I am seeing 4 plex with about 3K in income go for about 175K - 200k (w/ no association fees) and you can step up to fixers for about 125k
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
16y
OK, start with $859 rent per unit. Renting furniture for $120 a month is a separate business. Taxes in TX are high, and bugs are a problem, but you don't have heating problems or the damage inflicted by harsh winters. Assuming tentants pay all utilities, you should be close to the 50% rule.
OTOH, it sounds like a condo, so HOA fees are always a wild card. Personally, I loathe HOAs. Even when I lived in Houston for many years, which is rife with HOAs, I always avoided them.
So, here's my math:
Rent: $3436
Expenses: $1718 (includes vacancy and capital)
NOI: $1718
Desired cash flow: $400
Left for payment: $1318
Max loan (and price): $219,831.35 (assumes 30 years at 7%)
That's ignoring the down payment. Really, that's another way of saying you're making the same return on the down payment as you're paying on the loan. (If you're willing to invest your cash for zero return, PM me, I'll be glad to help you out. :-))
So, if we put in the down payment of 20%
Down: $43,955.27
Loan: $175,865.08
Actual payment: $1054.40
Cash flow: $663.60/month
Cash flow: $7963.20/year
Cash on cash return: 18%
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y
Most of the 1-4 unit multis that I see from the local MLS in my area aren't even worth the time it takes for running the numbers on them. So it doesn't surprise me to see the same thing elsewhere.
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
16y
Rent: $3436
Expenses: $1718 (includes vacancy and capital)
NOI: $1718
Desired cash flow: $400
Left for payment: $1318
Max loan (and price): $219,831.35 (assumes 30 years at 7%)
Can Jon or anyone else please explain me how the Max Loan amount comes to $219,831.35? I recalculated the numbers, but I get to $198,105.37. Am I missing some cost of $21k here? Thanks in advance! :D
Carlsbad, CA · Member since 2010 · 1k+ posts · 1k+ votes
16y
Rent: $3436
Expenses: $1718 (includes vacancy and capital)
NOI: $1718
Desired cash flow: $400
Left for payment: $1318
Max loan (and price): $219,831.35 (assumes 30 years at 7%)
Can Jon or anyone else please explain me how the Max Loan amount comes to $219,831.35? I recalculated the numbers, but I get to $198,105.37. Am I missing some cost of $21k here? Thanks in advance!
Down: $43,955.27
Loan: $175,865.08
Actual payment: $1054.40
I must be doing something wrong here, because if I use the loan amount of $175,865.08 at 7% interest for 30 years, I get an actual payment of $1,170.03.
However, if I use the actual payment of $1,054.40 to back into the loan amount, I get to $158,484.29, which is 80% of $198,105.37.