Monthly, quarterly, yearly cost of ownership

[Mike Schelske]

Hi,

I am slowly learning to analyze deals and I have a few markets picked out to research. So, when I first decided on multifamily properties I figured I'd be making bank and pay a PMC to do the heavy lifting concerning maintenance, resident calls, and vetting potential resident to rent to. As I read more I'm starting to ask myself how much of the rent will I actually get to call profit? What is the general cost of ownership month to month? Insurance, taxes, maintenance cost, unit sitting empty, eviction, renovation. Is there a diagram that shows the cycle of cost and resident from move-in to, moving-out?

Mike

[Seth McGathey]

Most likely for your first few years you will not make much profit from your cashflow. Most of your benefits are likely to come from the appreciation and tax benefits. If you invest in a stronger cashflow area like the Midwest, you can maybe make $100-600 cashflow depending on your down payment, interest rate, and rents. If you have someone else manage it, then shave some of that off.

I highly recommend people make their first deal a house hack if feasible. It is, in my opinion, the safest and easiest way to get into real estate and ease yourself into being a landlord. If you can BRRRR that property, even better.

Even if you can't house hack, I recommend going local first if possible, so you can self manage it and learn the ins and outs of being a landlord/property manager. 

If you can't do either in your market, then obviously doing really good research and building a good team in the market you choose is very important. 

If you decide to look into the Milwaukee market, feel free to reach out for help. I am an agent and I bc estor here myself and can also help you out a team together. 

Best of luck!