First investment property 3 unit

5 Replies

Have been lurking on the boards, videos, and podcasts for a while have ran the numbers posted below. Looking at a couple different properties but this one in my opinion has the most potential. First floor unit has already been remodeled. Second/third floor need some work. With the work being down I am considering starting my offer %15-20 below listing. Can anyone give me their input on this deal. Along with the best advice for a first time landlord. I know screening is a top priority. 

List price: 160k 


Expenses: $1375 + or -

P&I: $526

Taxes: $266

Insurance: $83~

Water/sewer: $200

Vacancy: 10% $100/month

Capex: $100

Maintenance: $100

Property management: $0 myself/Fiance was assistant property manager 5+ years. 

Cash flow: $1250

Assuming we agree to a price in the middle these numbers could vary. 

$28k down

$7k closing

$ 5k in rehab

Leaves me at a ROI of 37%

Even though the numbers all make sense in a perfect world still nervous about this as it is my first property. Would I be crazy not to jump at this?

Thanks in advance!

Eh I’d say Your cashflow will not be a true 1250 because your expenses are off  however it is still a great deal on paper and one worth pursuing 

The one-stop-shop for REI
Find Local Home Improvement Pros!
Check out our network of trusted, local contractors for all of your home improvement projects.
Find a Contractor

Following up on what Dennis said, depending on the area you're in and the age of the house/mechanicals/roof, your maintenance/capex might be higher. If you have 10% vacancy, it would be $256/mo, not $100. And even though you plan to self-manage, I always budget it in. 

I expect that leaves you with healthy cashflow, and your self-managing is icing on the cake. Looks like a good deal on paper.

Inevitably, there will be hiccups. Your first deal won't make you wealthy with cash, it will help build a wealth of knowledge and experience that you can leverage in your next deal. I'd jump in on this.

Not sure what ARV is for this property in your area, but perhaps this is a BRRRR opportunity, which is even better.

Thank you for the in depth reply. I’m sure working more with my agent. I could find that number out relatively easy. Although to be honest. Multi family/buy and hold was the “niche” I have been most interested/researching in so I am not to familiar with the method your mentioned. I will have to run the numbers more thoroughly. I was just assuming that I would not have 100% vacancy at once.