I'm looking for someone to run these numbers through their Excel tool (or whatever you may use for evaluating a property) to see if they line up with the numbers I am calculating. Please let me know what questions you have and any more info you need.
Here are the inputs:
Purchase Price: $171,000
Interest Rate: 5.125%
Down Payment: 15%
Total Amount Brought to Closing (down payment and closing costs): $22,875
Gross Rental Income When Bought: $1,050
Gross Rental Income 1 Year Later: $2,450
Monthly Water Bill I Pay: $83
Property Management Fee: Assuming 10%, but I manage this property for now, so for now it is 0%. Need to include the 10% for long term growth.
Monthly Taxes: $338
Monthly Insurance: $90
To - Date CMA Price: $210,000
I have a ton of analysis run in my Excel spreadsheet (such as monthly cash flow, cash-on-cash return, cap rates, etc.) I would really like to compare my numbers to someone else's spreadsheet for a sanity check. If you could please run these numbers and post your results, it would be greatly appreciated!
It would also be great for feedback on this scenario. What are your veteran thoughts on this deal? What advice would you give me for my next deal based on the above deal?
Is this a single family residence or what? Is the gross income $1050 per month? You think the gross income is going to more than double in 1 year?
This is a duplex. When I bought it, gross rents were 1050. I've put $6,000 into it for relandscaping/upgrading and took this over from a VERY lazy landlord in a very nice area, and now I have new tenants in the building for a new gross rent of $2,450
Oh wow, good job then. In my humble opinion you did very well. Especially in a higher end area. You're going to have fewer tenant issues and potentially more appreciation going forward. Carry on sir!
I went owner occupied. I'm currently "house hacking" again and close on a 4 family tomorrow that I am going to move into. I just want to get some feedback on my numbers being run. Don't want to put ALL my faith into my Excel spreadsheet for the return estimates without running it by a few people.
You did a great job! Getting the rent up that high makes all the difference!
I believe that it's always good to invest in a good location with a great product and charge a premium.
Can you share what exactly what was done in order to more than double the rent?
Great job. I hope my first deal goes this well.
@Tomer Ravid the previous landlord was charging $525/month in an area where market rent 5 years ago was $850/mnth for a similar apartment (2 bed 1 bath).
What I did was put in over 100 hours of landscaping work, upgraded the appliances, upgraded the kitchens and baths (all as cheaply as possible, for example, I painted pink tile white, used thermoplastic panels and liquid nailed them over the old tile backsplash, laid down new vinyl floors over the old nasty vinyl, etc) and was able to take very nice pictures and market the property very well.
I also allow dogs, so that is a huge competitive advantage in the area. It really was a matter of posting a high rent online way in advance of when I needed new tenants. That way you have more time to place a tenant and don't have to worry about time as much. I had leases signed way in advance.
What I'm calculating for my results are as follows:
Cash flow per year excluding property management: $10,541
Cash on cash return: 27%
Cap rate: 10%
2% rule: 1.43%
Cash flow per year including a future property manager: $7,601
Cash flow per year looking only at PITI: $14,762
These look good on paper, but I want to make sure my calculations are right, want to see if other people calculate these same numbers. Thanks in advance!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing