New To Real estate and wanted to get someones thoughts on a property

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Paul De Luca
Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
3y
Quote from @Owen D.:

This is an 8 bed 2 bath multi family listed for $125k and it looks like total rental income would be $1500 a month (which would be a cashflow of over $500 I think?).

I currently can't purchase, but want to get into the habit of analyzing deals. 

https://www.zillow.com/homedetails/5016-S-Aberdeen-St-Chicag...


 It could be a decent cash flowing property but it depends on the underwriting specifics. What kind of financing would you be using?

I haven't analyzed it myself, but I would expect the property to rent for a market rent of at least $2k+. Based on the listing description, the property needs work, sold as is, and is only accepting cash or conventional offers which further indicates the property is going to need more TLC than it appears in the photos. So if you roughly estimate $10k-$15k/unit in cosmetic improvements, after that the cash flow could be decent but your CoC return may not be great. Depends on how much you're putting down, if you're living in the property or not, condition of CapEx, etc.

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  • Account Closed
    Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
    3y
    Quote from @Owen D.:

    This is an 8 bed 2 bath multi family listed for $125k and it looks like total rental income would be $1500 a month (which would be a cashflow of over $500 I think?).

    I currently can't purchase, but want to get into the habit of analyzing deals. 

    https://www.zillow.com/homedetails/5016-S-Aberdeen-St-Chicag...

    I'm glad you are t least making the effort to figure things out. The first thing I ask when I'm considering buying a property is "what am I going to do with this place", "who is my target audience".
    1Reply
  • Melissa Ziegler
    New to Real Estate · Columbus, OH · Member since 2023 · 6 posts · 9 votes
    3y

    When analyzing an investment property, there are several important factors to consider to ensure you make a well-informed decision.

    1. Investment Strategy: As @Account Closed asked, what is your investment strategy? BRRRR, Buy and Hold, Fix and Flip. This will determine if the property is a good deal for you.
    2. Location: The location of the property is critical. Look for areas with good growth potential, low crime rates, proximity to amenities (schools, shopping centers, public transportation), and potential for rental demand. In this case, the property appears to be next door to a boarded-up, vacant home.
    3. Market Research: Conduct thorough market research to understand the local real estate market trends. Sold comps, rental rates, vacancy rates, and historical appreciation.
    4. Property Condition: There are only photos of the unit that has been remodeled. You will want to estimate the repair costs of the second unit.
    5. Rental Income: If you plan to rent out the property, research the local rental market to determine the potential rental income. How much will each unit rent for?  You determined that you could gross $1500/mth. This will help you calculate your potential return on investment.  To determine what you can net, remember to factor in costs such as property taxes, maintenance including landscaping as you are responsible for maintaining the exterior and interior common areas, property management fees, owner-paid utilities, vacancy, insurance.
    6. Bigger Pockets Tools: On the BP website, there are a number of tools to help you analyze a property. Check out the calculators under the Tools tab.
    1Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    3y

    Why haven't you tried using one of the BP Calculators to evaluate?

    Logical Property Management4.9455 Reviews
    WebsiteView Page
    0Reply
  • Paul De Luca
    Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
    3y
    Quote from @Owen D.:

    This is an 8 bed 2 bath multi family listed for $125k and it looks like total rental income would be $1500 a month (which would be a cashflow of over $500 I think?).

    I currently can't purchase, but want to get into the habit of analyzing deals. 

    https://www.zillow.com/homedetails/5016-S-Aberdeen-St-Chicag...


     It could be a decent cash flowing property but it depends on the underwriting specifics. What kind of financing would you be using?

    I haven't analyzed it myself, but I would expect the property to rent for a market rent of at least $2k+. Based on the listing description, the property needs work, sold as is, and is only accepting cash or conventional offers which further indicates the property is going to need more TLC than it appears in the photos. So if you roughly estimate $10k-$15k/unit in cosmetic improvements, after that the cash flow could be decent but your CoC return may not be great. Depends on how much you're putting down, if you're living in the property or not, condition of CapEx, etc.

    1Reply
  • Jason JamesPro Member
    Rental Property Investor · Hillsboro, OR · Member since 2018 · 117 posts · 64 votes
    3y

    @Owen D. what tools are you using to analyze? also have you clearly defined your buying criteria. 

    0Reply
  • Rafa A.
    Member since 2021 · 6 posts · 3 votes
    3y

    First of all, kudos on analyzing deals even when you can't purchase! When I'm analyzing a property, I look at many different factors based on my goals. I'd suggest you browse some calculators in the "Tools" section and find one that works best for you. Here are some great ones I found when I was starting out: 

    - https://docs.google.com/spreadsheets/d/1en-Llf6Egc-GIisF41Ok...

    - https://docs.google.com/spreadsheets/d/1OEON18qE-zS8Dm16fPQP...

    -  https://docs.google.com/spreadsheets/d/1Dzi7cfMOTwGN_mkTLKv4...

    - https://docs.google.com/spreadsheets/d/1tGdk-LrSZnVja3CnIjf5...

    0Reply
  • Owen D.
    OP
    Member since 2023 · 2 posts · 1 vote
    3y

    Thank you Paul!

    1Reply
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