Developer 路 Philadelphia 路 Member since 2017 路 3 posts 路 0 votes
An agent friend of mine found a decent property and I want to start running the numbers for some practice. It is a 5 unit mixed-use(4 apartment units, 1 commercial unit) generating $5,430 in rental income. List price $980,000. Below are some values I am having difficulty finding.
Closing costs. Seller already updated the units. Do I need estimated repair cost? Maybe for minor stuff? Points and other charges from lender? Mixed-use cap rates for Fairmount, Philadelphia? Fixed and variable expenses? Increase statistics?
Also, I might have an equity investor or several equity sources. What might be some methods to purchase and hold this property and possibly house hack it.
Is the income ($5430) excluding expenses(i.e mortage, tax, utilities etc) ? Definitely you need to estimate repair costs. Ideally you would have seller to fix all known issues. Also talk to existing tenants to find out deferred maintenance requests. As to points and other charges you need to shop around to see who has best rates. If I were you, I would use banks or lenders other friends have known for a while to avoid some lender's bait and switch scheme.
Developer 路 Philadelphia 路 Member since 2017 路 3 posts 路 0 votes
6y
@Long Li I assume the income is gross, before expenses, that the landlord gets for rents, but that is a good one to double check. Is that repair costs to update the units because I believe the landlord already put in new kitchens, etc.? Is deferred maintenance the repairs the landlord has not done for the tenants that they are requesting for? I will start looking into lenders friendly to my sphere. Thank you!
@Kenny Seagren The repair costs are something like driveway, roof, window, water heaters to name a few. Those are costs you will encounter sooner or later. Also a property like this should be generating at least around 7k - 8k to be considered. Do some comparison against similar properties to see how much cash flow you will get after expenses.