Vermontville, MI · Member since 2017 · 10 posts · 0 votes
What is the average apartment complex size to produce 20k cashflow? Per month. It's a vague question I suppose but I could get some idea from experienced apartment complex owners I would be grateful.
Vermontville, MI · Member since 2017 · 10 posts · 0 votes
6y
Really? That's a lot less than I anticipated. Wow. Obviously, there are variables but it's good to get ideas. I am going into info gathering mode. Hopefully I can level up. Thanks guys.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
6y
@Jonathan Brandenberger If you are talking 20k/mo in your pocket cash flow over 100 doors but fewer than 150 doors. With all due respect; I think @Bruce Petersen may have missed the context of your question.
What is the average apartment complex size to produce 20k cashflow? Per month. It's a vague question I suppose but I could get some idea from experienced apartment complex owners I would be grateful.
Since rent is collected on a monthly basis, this should be fairly easy. If the average rent in your area is $1000 per month, then it's 20 apartments. If it's $2000 per month, then it's 10 apartments.
Average rent can vary greatly from area to area, so try and get an idea of what the average rents are, then divide into 20k for aprox number of units.
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
6y
@Peter Nikic What you have provided is the formula for calculating revenue per month. @Jonathan Brandenberger asked about cashflow so you also have to subtract operating expenses, debt burden and CapEx before you get to cashflow.
Vermontville, MI · Member since 2017 · 10 posts · 0 votes
6y
Let's say I have 100 units. Nice complex, good management. Is it safe to expect 75% occupancy? Is that low or high? Than based off that figure I ask my previous question.
Rental Property Investor · Lexington, MA · Member since 2015 · 42 posts · 39 votes
6y
Hi @Todd Dexheimer do you have any idea which states or cities are those where you can buy 150-250 units range in around $16 million and can make approx $240K per year as you mentioned in your answer? Please advise. Thanks
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
6y
Nearly all of the midwest, south, south east, north, northeast. I would say exclude NYC area, Boston, San Fran Bay area, LA Area, Seattle and Portland. The majority of the country this is achievable. Some areas are going to be $150k/unit and others will be $75k/unit.
Real Estate Coach · Salt Lake City, UT · Member since 2017 · 272 posts · 414 votes
6y
@Todd Dexheimer nailed it... but, I'll add some meager data.
We closed on 55 units about 6 months ago. After operating expenses and PITI, we're netting about $12k per month right now. Once the interest-only period on the loan expires and taxes are re-evaluated, I expect that number to drop to about $6-8k at the current income level. Of course, we're renovating and pushing rents up, so we should get back up to the $10k per month mark.
As mentioned, there are variations between regions. Our apartment is in South Carolina and Todd is up north in the really really cold region. I lived in St. Paul for a bit and can tell you from experience...
Real Estate Coach · Salt Lake City, UT · Member since 2017 · 272 posts · 414 votes
6y
Question was how many UNITS do you need for a certain cash flow. Margins are thinner in some areas than others, so numbers in SC may not match numbers in the "really really cold" Twin Cities. My original comment was made somewhat in jest... but, since you asked...
What does being "really really cold" have to do with pricing? Fewer people move in a Minnesohta winter than a Miami winter. Reduced demand on the vacant units would push pricing down to get units filled. So, all other things equal, winter pricing would be lower in the "really really cold" regions than the warmer areas.
I had a rental in Salt Lake City for many years that happened to have a few winter vacancies. We had to drop the rent significantly to get it filled. My San Diego rental didn't have that problem.
If you break it down to cash flow per door of approximately $100-$200. My goal is$150 per door or better. So at $150 per door it will take 133-134 units.
Investor · Minneapolis, MN · Member since 2016 · 254 posts · 228 votes
6y
@Brian Briscoe I can see how vacancies & thus rent would be affected in upper B & A class units, though I wonder if that would be the case in medium to low income or government subsidies housing where you'd expect less tenant migration during cold temps..
@Brian Briscoe I can see how vacancies & thus rent would be affected in upper B & A class units, though I wonder if that would be the case in medium to low income or government subsidies housing where you'd expect less tenant migration during cold temps..
Brian Is 100% spot on. This is the case in A, B and C class. People in cold climates don't want to move in the winter, so you have much less demand and pricing does suffer. We have basically avoided this issue. After having several winter vacancies in my early years, our leases all expire between April 30th-Sept 30th. Even our month to month have blackout dates during our cold months.
As for price/door, I don't think it have much effect on it. Our prices/door are as high or higher than most southern areas.