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Updated almost 6 years ago on . Most recent reply

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Santos Vargas
  • Rental Property Investor
  • New York City, NY
1
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How do I know a good cash flow return of I pay a rental in cash

Santos Vargas
  • Rental Property Investor
  • New York City, NY
Posted

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

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Aaron Montague
  • Rental Property Investor
  • Brookline, MA
777
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1,870
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Aaron Montague
  • Rental Property Investor
  • Brookline, MA
Replied

@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%

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