Within the next couple months I will be buying my first rental property. I will be implementing a buy and hold strategy with small multifamily properties. My question is, how do I narrow down my search to find the best property on the market right now. I have done my analysis on 17 different duplexes and one fourplex, factoring what profits would be after fixed costs (insurance, taxes, mortgage) and the 50% rule. I then see how much the seller would have to lower the asking price for me to make $100 of profit per unit each month. What else do I need to take into consideration? All the properties are in very similar location aside from a couple and they were all built within 1888 and 1910. Is the next step for me to go on site and check out the properties and the potential work that needs to be put into them (furnace, plumbing, roof, siding)? I would greatly appreciate any insight on what I am not taking into consideration or any comments any one has!!
Create a spreadsheet in excel that will help run the numbers quicker.
Check out this webinar from Brandon, https://youtu.be/-YTvYm-kb1w ITS and AWESOME break down...
You need to know the following:
* Find out what the previous landlord pays for (example: water,
* Actual monthly rents (not pro forma) in the near area use zillow or craigslist. or if you have a realtor friend
* Vacancy Rate (get from local realtor)
* Maintenance & Repairs (i usually use 5%)
* Property Management (I use 8% to 10%) even if you are going to manage it your self.
* Property Tax's (look at county assessors website)
* Insurance (call local insurance company give them the address)
* Mortgage payment (download a mortgage calculator for your phone)
* Capital Expenses
* All utilities:
Hope this helps.
Jose Tamayo Jr.
Congrats on taking action and good luck. Keep us updated!
Will Do! Thanks!!
No problem I am glad I could help out, But since you already started then now you need to keep on going and not stop!
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