First time Multi-Family Investment
I'm looking into purchasing my first multi unit building. Ideally, I would like something near San Francisco. Currently learning how to evaluate a property properly. Looking in the 1M price point or under which can be difficult in the area. I've always imagined having an investment property (maybe a duplex or single family) in a nice area with a long term family living in it but the numbers I have looked at make more sense to buy in a not-so-great neighborhood with 4+ units. Any insight for a first time buyer?
https://www.zillow.com/savedhomes/for_sale/2097367...
As I'm sure is the case with most people on here, I'm looking for a property that is ready to go and I can generate + revenue from the get-go. Per the apt. building in the link provided, the numbers seem solid to me - please note if I'm missing something.
Appreciate any insight you all can offer.
- John
Most Popular Reply
@John Shmon Just a quick glance, I'd want to know what they're paying for insurance. Maybe I'm nuts but I think that pools generally increase liability (fenced or not) and the insurance premium might not be too pretty. But for basic numbers:
$85,500
-$51,180 per year mortgage ($800K @ 5%)
-$10,000 property taxes
-$8,550 in property managing (using a 10% standard)
-$3,000 in home insurance (just guessing)
That leaves you about $12K, roughly $1K per month for any maintenance (in a 1964 property), owner paid utilities, gardening, etc.
Maybe you end up clearing $500 per month on your $200,000 investment. That's a 3% cash-on-cash return. Any kind of cap-ex like an HVAC replacement, resurfacing that pool, dealing with that flat roof, etc. and your upside down (from a cash-flow perspective).
Anyway, just my 2 cents...