Interested in a property

3 Replies

Hello everybody:

I am new to the real estate world and seeking advice.  I am trying to purchase my first rental property.  It is a 4-plex for $65,000.  Currently, all 4 units are rented and the total rents add up to $2,265.  1 tenant has been there for 20 yrs, the other 5 yrs, and the others about 2yrs.  The tenants pay their own electricity.  The landlord pays the water, which comes up to $2600 annually.  Also, the landlord pays about $360/month for heat.  The taxes are $4600 per yr.  I plan to hire a property manager, who charges 9% of the gross rental income.  Do you all think it is a good deal?

@Dion Jacobs

Assuming that $65k is actual market value and you are paying cash I'd say it's a good deal. Without knowing details and how much work the property needs with the numbers you provide your monthly cash slow should be around $760 which is 14% cash on cash return. 

Try to use rental property calculator and see what else you need to factor in your calculations 

@Yuriy Skripnichenko :

Thanks for the response.  I appreciate the advice.  I ran the numbers through the rental property calculator and there is good cash flow.  The property is in decent shape; it may need some minor repairs.  There appear to be no significant problems and the roof is less than 10 yrs old.  I plan to have a home inspection sometime.  My overall impression of the property is that it is solid.  I am leaning towards doing a cash purchase.  
you're getting >3% rent to price ratio. that's an awesome deal in my opinion.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.