Property Analysis Help

6 Replies

Hello All!!!

This is my first post after weeks of perusing the site and I've learned so much!

I wanted to get your thoughts on my property analysis. I am interested in putting an offer on a multifamily home near the University of Maryland but I just don't know if its a good deal. Here are my numbers. Total upfront cash is about 15k for this property. One 2 bd room and Two 1 bd rooms. Any feedback would be helpful!

Annnual Property Data
Operating IncomeMonthly
Gross Scheduled Income$3,700
Vacancy & Credit Loss @ 10%$370
Effective Gross Income$3,330
Estimated Other Income (Late Fees)$-
Gross Operating Income$3,330
Operating Expenses
Taxes$433
Insurance (includes MIP)$370
Water/Sewer$150
Trash$30
Property Management @10%$-
Gas and Electricity$-
Repairs @5%$185
Landscaping$50
Reserves @5% (10K already on hand)
Total Expenses$1,218
Net Operating Income$2,112
Debt Service (P&I)$1,865
Cash flow (want is >$100 per door)$247

Where is the property? If it is Takoma Park then it sounds like you are probably not aware of their rent control. Do you plan to live in the property? If not then your down payment is way too low and you would not have mortgage insurance. your vacancy rate is way too high.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635

@Russell Brazil thanks for the reply. This property is in TP. I'll do more research on the rental control laws in the area. Is there anything that initially comes to mind that I should be leery of?

Also, what are your thoughts on vacancy rate? I've read vacancy rate should be 5-10%.

Originally posted by @Lisa Mays :

Russell Brazil thanks for the reply. This property is in TP. I'll do more research on the rental control laws in the area. Is there anything that initially comes to mind that I should be leery of?

Also, what are your thoughts on vacancy rate? I've read vacancy rate should be 5-10%.

 In that location, if you know how to market your unit before your old tenant leaves you could have virtually no vacancy.

The multis in Takoma Park if purchased using leverage are almost guaranteed to be cash flow negative. They really only make sense if you are paying all cash and have deluded ones self into thinking theyes will help overturn TPs rent control as people have been trying to do for decades now.

Your rent is likely on the high side then too in your estimate

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635
Originally posted by @Lisa Mays :

@Russell Brazil do you have strong thoughts about the Hyattsville rental market?

 Hyattsville is pretty descent. Every neighborhood is different of course but in general it's pretty good.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635

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