Would you buy this 8Plex?

4 Replies

Team,

I'm looking at an 8plex currently in Minneapolis... 4 x 2-beds, 4 x 1 beds... Below are some #'s. For a downpayment of $100,000, is this property worth it? It is in a very nice area, 3 blocks from where I owner-occupy my 4plex.

I would also have a monthly dividend payment to investor for $600. So there is not a town of cashflow from the current rental perspective. There is upside in this part of Mpls, and appreciation/tax advantages/mortgage pay-down will all be nice.

I am not putting a dime into this one-- I am splitting with an investor 50/50. He will cover downpayment.


Given these #'s, What would you do?

Price per Unit: $68,750.00

CAP Rate: 6.73%

Monthly rent: Purchase Price: 1.16%

50% Rule: 48.64%

NET OPERATING INCOME: $37,041.00

ANNUAL CASHFLOW: $8,241.00

I think with the property being on the edge of being a deal/no deal you should consider looking elsewhere. It is definitely enticing to find a property within walking distance of where you are - and its definitely worth it to have it - but I would be cautious if that is the part of the deal that would make you take the deal. 

If you lived else where, say 20 minutes away, would it still be on the table? 

Thanks Steven.

Ideally, it would be awesome to have my properties all within 2 mile radius -- from a management and community marketing perspective... That is definitely a factor for looking at this one.

However, I'm just not certain there is enough 'fat on the bone' from this property to justify a $100,000 investment. That money may be better invested elsewhere.

Originally posted by @Tom Henderson:

Team,

I'm looking at an 8plex currently in Minneapolis... 4 x 2-beds, 4 x 1 beds... Below are some #'s. For a downpayment of $100,000, is this property worth it? It is in a very nice area, 3 blocks from where I owner-occupy my 4plex.

I would also have a monthly dividend payment to investor for $600. So there is not a town of cashflow from the current rental perspective. There is upside in this part of Mpls, and appreciation/tax advantages/mortgage pay-down will all be nice.

I am not putting a dime into this one-- I am splitting with an investor 50/50. He will cover downpayment.


Given these #'s, What would you do?

Price per Unit: $68,750.00

CAP Rate: 6.73%

Monthly rent: Purchase Price: 1.16%

50% Rule: 48.64%

NET OPERATING INCOME: $37,041.00

ANNUAL CASHFLOW: $8,241.00

Hi Tom,

 In my opinion you can get better bang for your buck else where.

$100,000 goes a long way in Ohio and Michigan and you can get some very decent figures in solid B class areas.

It does take time to establish relationships with the right people in order to insure success.

Just returned from a 2 day trip in Columbus. There is some awesome stuff happening there.

Sorry for sounding a bit bias with Ohio :)

but I do think you can make a better return on the $100,000 cash.

My 0.2cents lol

Thanks for reading.

Im a fan of not putting money down and buying creatively. I cant imagine putting down $100k for a 6.anything CAP rate. Just my opinion.

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