Updated almost 7 years ago on . Most recent reply
Rental property in Allentown,Pa
Hello everyone,
I was looking at purchasing a three unit in Allentown, Pa. This would be my first deal, so it is a little nerve wracking to pull the trigger. It is the best deal that I saw in our market in a while.
The purchase price would be 120,000, but it needs some work. When running my numbers, I allotted for about $45,000 for repairs and a fire escape (this needs to be added to the second and third unit. Hopefully, this is high. I got estimates for the fire escape at about $25,000 to build and install it. The rents are $800, $650 and $600, (market value, $700, $800 and $800). The utilities are at about 60%, I'm looking to lower this a little as well. The cash flow for the month would be about $300 and the ROI is about 5%.
One way I was looking to lower expenses would be to split the hot water heaters, so each unit has their own and is responsible to pay that.
The purchase amount is going to be paid in a conventional 30 year loan and the repairs are going to be paid out of pocket.
Is this a terrible idea?