Developer · Atlanta, GA · Member since 2016 · 165 posts · 32 votes
Im looking at getting a quadraplex under contract and wanted some feedback on my analysis. Do you think its a good deal? They countered my first offer with $292,000 with no closing cost. I am gong to counter with $280,000 with $5000 closing cost. Its been on the market for a while also. Their asking price is way too high. Check out my analysis and the numbers here ------> https://www.biggerpockets.com/calculators/shared/537807/13662d27-5d2e-4fe8-918a-033ef4340017
Based on what you posted rents are ~$2,400 and mortgage is ~$1,700 that leaves $700 for expenses to break even. I doubt that is enough room for taxes insurance property management (would likely be $240 on its own) vacancy, etc. I think the realistic analysis is the one on the second page showing monthly negative cash flow of a few hundred dollars a month which I’d say is a bad deal.
What is the monthly income used in the calculator based on? If that is market rent, this is a (probably) bad deal. If it is current rents and there is significant room to raise rents it could be a good deal. There are a lot of expenses that you aren’t considering it seems like to get to your NOI estimate. I’m not a huge fan of just blindly following the 50% rule but just looking at that in the calculator shows you that this wouldn’t be a good deal (negative cash flow).
@Scott Anderson yes there is room to raise the rents. Up another $100-$150. I did my analysis two ways with taking out cap ex, repairs, management, & vacancy and this link I put up without. It cash flows both ways so I'm curious to why this is a bad deal?
Based on what you posted rents are ~$2,400 and mortgage is ~$1,700 that leaves $700 for expenses to break even. I doubt that is enough room for taxes insurance property management (would likely be $240 on its own) vacancy, etc. I think the realistic analysis is the one on the second page showing monthly negative cash flow of a few hundred dollars a month which I’d say is a bad deal.
@Rashad Jones Jennings . Not too familiar with Ga market, But that's about $70k/unit. With rents topping at $600-650/month/door ? who pays utilities? I feel that you can get better than this. Have you checked loopnet? There are better deals there ... (although some are not that great either). For this price per unit in Raleigh, NC, you get rents above $850/month.
@Rashad Jones Jennings . Not too familiar with Ga market, But that's about $70k/unit. With rents topping at $600-650/month/door ? who pays utilities? I feel that you can get better than this. Have you checked loopnet? There are better deals there ... (although some are not that great either). For this price per unit in Raleigh, NC, you get rents above $850/month.
Tenants pay utilities and I can get the rents up to $850. They are at about $700 now.