Real Estate Agent · Newark, IL · Member since 2017 · 11 posts · 4 votes
Looking at picking up a multi unit that would generate $11,600/year after all expenses and would require $50K Investment for the 20% down payment. Additionally after upgrades I can charge more for rooms and turn it into about $18k/ year... Thoughts? Im getting a 1.6% if I follow the 1% rule...Still new and nervous about making any commitment even when I think it looks good.
Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
5y
@Zachary Ulven if you're including all expenses (cap ex, repairs, management, vacancy, etc) that sounds like a pretty strong deal to me. Especially in this market.
I also like the fact that you're going to be able to add value immediately. Adding value provides downside protection. What are you going to do to take it from 11.6k to 18k year?
Rental Property Investor · Columbia, SC · Member since 2010 · 1k+ posts · 2k+ votes
5y
@Zachary Ulven if you're including all expenses (cap ex, repairs, management, vacancy, etc) that sounds like a pretty strong deal to me. Especially in this market.
I also like the fact that you're going to be able to add value immediately. Adding value provides downside protection. What are you going to do to take it from 11.6k to 18k year?
Real Estate Agent · Member since 2019 · 285 posts · 149 votes
5y
@Zachary Ulven if you're in a good place financially and the numbers work then I would take advantage of it. There's never going to be a pretty deal and as Brandon Turner always says "your first deal isn't about making a ton of money." If you're able to then that's great, but having that money sit in a low interest savings account for the next 10-15 years is a lot worst than any potential downsides, in my opinion.
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
5y
@Zachary Ulven how many units? That's a lot of cash for just $50K down so it seems like it's likely in a rough area. Doesn't mean it won't work but will be very hands-on. Can you provide additional details?
Real Estate Agent · Newark, IL · Member since 2017 · 11 posts · 4 votes
5y
@Nicholas L. 4 units. Its a good area just very rural. Just got off the phone with the lender. It will require 25%. Its looking more like $70K down but the return would stay fairly accurate.