multi family investing

6 Replies

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Originally posted by @Account Closed :

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Only in America can you buy a 7 unit for 250K with monthly gross rents of $4850!!!!

A bit of false hyperbole there ... deals as such are not available "only in America" ... we acquired a six unit last year for 54% of  the above price which has gross revenue of $4750 ...  and it's a little to your north-east.

Of course, gross revenue is really meaningless without knowing the operating expense ratio ... 

Yup it’s just that easy!!! Just like throwing a dart at a dart board. Just pick a unit and bam you are rich!

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Hello Roy!  Unless it's brand new I would not buy a rental property without knowing the income and expense on it. You implied that you did not know that and that can be quite risky.  You might have known that before you bought and made that statement as part of a joke.   If that statement was part of a joke I apologize.

Originally posted by @Michael Lee :

Hello Roy!  Unless it's brand new I would not buy a rental property without knowing the income and expense on it. You implied that you did not know that and that can be quite risky.  You might have known that before you bought and made that statement as part of a joke.   If that statement was part of a joke I apologize.

Michael

You read my post out of context.  I was responding to the OP of the thread ... who's account has since been closed and his original post disappeared.

What I implied in my above response is that gross revenue is only part of the picture in determining if a property is a "deal" and that even a high ratio of revenue to purchase price is meaningless without knowing the operating costs.

That said, we have purchased properties (tax sales, mortgage sales, etc) where the operating expenses are unknown and the revenues could be zero (i.e. vacant property).  In those situations, you draw upon your knowledge of the local market, the condition of the property (as far as you are able to assess it) and your experience with making unloved / uninhabitable spaces rent ready to decided an appropriate price to pay for the asset.

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