First time investor seeking advice on an opportunity

5 Replies

Hello all,

I am looking to be a first time investor in Illinois while living in Iowa. It would be a multi-family home with two units (two bed / one bath, each). For now, the numbers I'm anticipating are as follows:

Purchase price: $80,000

Current rent: $625/each

I'm looking for opinions on if it seems like a reasonable deal or not? How to approach the seller about it in order for both of us to walk away happily?

Thank you all in advance!

It would help if you penciled out the expected monthly costs, including whether landlord or tenants pay all or some utilities. Also, how is the ocndition of the property? As a rule of thumb, $1,250 rent on an $80,000 purchase sounds promising.

@Chase R Roehm
With just those two numbers, it looks great, but there are many others to consider. What condition is it in? What are the ages of the roof/HVAC/plumbing/appliances,etc. Does it need work? How old is it? What are the taxes and insurance? Factor in ongoing maintenance and vacancy costs. Is there an HOA? If not what landscaping do you need to worry about? What class is the neighborhood? This could affect many of the above. Are you going to mange it? Either way you might want to factor in property management costs in case you change your mind.

You could try one of the BP calculators to help work some of the math. Hope that helps!

@Chase R Roehm

Edit: Tenants pay all utilities currently

Building is in good condition but back need new mechanical in the next 2 or 3 years I would imagine. I am a plumber and experienced in trade related work so any upkeep or work to be done I could do myself or hire a capable friend to do said work.

If you are in Illinois, why invest in Iowa? You surely can find similar deals much closer to you so you don't have the spend the money or time to manage a property farther away. Just the numbers look fine, but that usually means there are some other things that you are missing.