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Updated almost 6 years ago on . Most recent reply

How do I know a good cash flow return of I pay a rental in cash
I'm looking into buying a property in Pennsylvania , Tannersville , in cash . $250,000 multiplex 6 bedrooms 2 baths , 2 kitchens , two level home ,property tax of $5,885 in 2019 , I want to take the second floor and rent the 1 floor . There 1 electric meter I would have covered into 2 meter a cost of $2,000.00 , well water , and septic tank set , heating electric / oil "I would pay" . 3bedroom 1 bath n kitchen per floor ., I have been inform that going rate of rental is $1,000 -$1,200. After my guesstimate I'm looking at a cash flow of about $300. After expenses and taxes monthly of 490$ . I know I don't fully have all the numbers in expenses but regardless does anyone believe this would be a worth deal for a $300.00 or even less cash flow monthly ? Thanks guys . Newbie
Most Popular Reply

@Santos Vargas I would look at this house as an investment, even if I was going to live in it for a while. It gives you a clear picture of what it looks like long term. This is not an investment I would make due to the ROI, which stands at only 3.18% assuming your can get $1200/unit/month. I don't have the full set of numbers, but I guessed. As @Morgan Wallace said, do you have the rest of the numbers available? The ones in italics are the ones I made up.
Monthly Mortgage payment | $0.00 | Last Years |
Taxes | $ 490.42 | $ 5,885.00 |
Sewer and Water | $ 150.00 | $ 1,800.00 |
Trash | $ 50.00 | $ 600.00 |
Heat/Utilities | $ 250.00 | $ 3,000.00 |
HOA/Legal | $ - | $ - |
Cap Ex and Ops | $ 250.00 | $ 3,000.00 |
Insurance | $ 100.00 | $ 1,200.00 |
Mgmt Fee | $ 240.00 | 10% |
Vacancy | $ 194.40 | 8% |
Total Expenses | $1,724.82 | |
Unit 1 | $ 1,200.00 | Unit 7 |
Unit 2 | $ 1,200.00 | Unit 8 |
Unit 3 | $ - | Unit 9 |
Unit 4 | $ - | Unit 10 |
Unit 5 | $ - | Unit 11 |
Unit 6 | $ - | Unit 12 |
Total Revenue | $ 2,400.00 | Yearly |
Cashflow/month | $ 675.18 | |
Cashflow/year | $ 8,102.20 | |
Cash on Cash Return | 3.18% |