I'm looking at these numbers what do u think

6 Replies

I've never had a mortgage before. I can maybe cover 20% down but I'm hessitent cuz I'd be pretty broke I'm thinking maybe I should keep saving before I buy my first property.

There's a 3 unit the bottom is a grocery store it's been occupied 10 years. $900 per month current rent 

Upstairs there are 2x 2 bedroom apts. $600 per month each 

Total: $2100

Listed $110,000 

Tax: $166\mo

Insurance$176/mo

Utility's; $100/mo

Lawn/snow care: $50/mo

Vacancy:$100/mo

Repairs: $100/mo

Capex: $100/mo

Property management: $200/mo

Mortgage$462:mo

Total expense:$1443

Monthly cash flow: $657

Annual cash flow: $7884

$22,000 down

Cash on cash return %35

I guess that's what the current owner pays in insurance kinda kills the deal a bit. Maybe because it's commercial it's higher then normal.

I worry about the store front if the current tenant moves or gos out of business it could be vaccant a long time. It's a grocery store and walmarts not far so idk how it stay in business.

Are you sure you can get a 20% down loan? That’s a mixed use property and a multifamily too. Unless you have a connection I don’t the standard would be 25 or even 30% if it needs to be a commercial loan.

@Cj Thompson Just some food for thought: Have you talked to a commercial lender? Since it’s a commercial property (with the business) you’ll have to handle whatever terms they have. Ignoring the amortization table at the moment, they’ll usually want to see 6-9 months of PITI and/or a net worth larger than the loan amount. If you’re almost broke I’m not sure how you’d jump either of those hurdles. If you went the HML route you’ll end up with a materially higher interest rate. Not to say it’s the bad choice, but it impacts your numbers and potential exit.

I'm actualy gonna pass on this one. I don't think I want to start with a commercial property. Plus I don't have the down payment plus reserves I rather start out with somthing half as expensive but with the same 2% rule.

I have some money I'm really just trying to figure out more before I do a deal. I'm gonna keep reading lissening and asking questions.

Originally posted by @Andrew Johnson :

Cj Thompson Just some food for thought: Have you talked to a commercial lender? Since it's a commercial property (with the business) you'll have to handle whatever terms they have. Ignoring the amortization table at the moment, they'll usually want to see 6-9 months of PITI and/or a net worth larger than the loan amount. If you're almost broke I'm not sure how you'd jump either of those hurdles. If you went the HML route you'll end up with a materially higher interest rate. Not to say it's the bad choice, but it impacts your numbers and potential exit.

 Yea my net worth does not match the loan amount lol but I'm not flat broke. I would def like to have good reserves for any deal I do and how much I should have I'm trying to understand.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here