How much would you pay for a 4 plex with $40,200 yearly income???

Question

Amy A. · Answer

You need to buy Frank Gallinelli's book about cash flow and read it yesterday.

Steve Moody · Answer

There are a lot of factors that would go into the decision factor for me. How much are you going to put down? Are the utilities owner paid, or paid by the renter (or both) What's the estimated monthly cost of utilities paid by the owner? You mentioned rehab, but didn't mention how much that's going to cost. Factor in the cost of insurance, CapEx, and regular maintenance. Even though you expect the units to remain rented long term, still factor in some vacancy, 5% maybe? (one unit being vacant for 1 month a year = 2% of your rental income).

What do you consider to be a good Cash-on-Cash %? What's the minimum cash flow you want per door, per month?

There's a good rental property calculator on this site under 'Tools' in the header bar, or you can make your own spreadsheet (as I have, though it's still lacking a lot)

Michael Bowser · Answer

@Parker Dresser I never look up that way, thank you for correcting me. I always look in the greater Portland area so it always has its price tag.

Parker Dresser · Answer

I just bought a couple in Bangor, Maine for just over $200,000.  They were not in the best neighborhood but they still pulled in $900 per unit.

Michael Bowser · Answer

I could just give you a number of what I would pay. But what I will pay here in Maine to what you will pay will change. I mean here in Maine I could pay up to 700K for a nice 4 Unit, or on the low side 350K that could need work. Also depending on the location and how in demand that unit could be you could get more or less rent for the property which would instantly change the price you would want to pay or be willing to pay.

I would suggest to look into the market area you are looking at and compare all the rents that are up and find out what the value of each of those buildings are. I would also calculate all your expenses against the 40K you are bringing in, to make sure you net out where you want to be.

You don't want to be in over your head.

How much would you pay for a 4 plex with $40,200 yearly income???

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