New to this and appreciate ANY input!
I have the opportunity to buy income properties from a company called Strongbrook. I have come across BiggerPockets (thank goodness) and have read a forum on Strongbrook that has made me wary. I too have had some really good advice here on BiggerPockets. This being one of them (to post here) from Joshua Dorkin.
These are just some of the examples that Strongbrook provided at my request. I live in Oregon and these properties are in Indiana and Tennessee. They recommend these areas because RE prices are low but rents are average. They have provided 5 yrs of Income/Expenses. I will include second year, as that is the lowest income year. All taxes seem unbelievably low to me & sq footage very small. You'll find at the bottom of each a "*(…)" that I have added for discrepancies as compared to property 1Assumptions
Downpayment 20%
Closing Costs 5%
Interest Rate 5.125%
Property Mgmt Fee 8%
Vacancy/Repairs 14%
Annual Rent Increase 5%
#1 E Stop11 Road, Indianapolis, 46227 Purchase Price 79,900Down Payment 15,980
Est Closing $ 3,995
Coordination Fee 3,500
Total Out of Pocket 23,475
PM Setup/Misc 2,500
Yr Built 1984
SqFt 1174
Beds/Baths 3/1.5
Mo. Rent 950.00
Mo. Principal 348.04
Mo. Taxes 54.97
Mo. Insurance 41.67
PITI monthly 444.67
Income/Expenses (Year)
Gross rent 11,970.00
Taxes 679.39
Insurance 500.00
Property Mgmt 957.60
Vacancy/Repairs 1675.80
Net Operating Income 8157.21
Net Mo. Cash Flow 333.38
#2 Milwaukee Ct, Indianapolis 46217
Purchase Price 79,900
Down Payment 15,980
Est Closing $ 3,995
Coordination Fee 3,500
Total Out of Pocket 23,475
PM Setup/Misc 2,500
Yr Built 1983
SqFt 1080
Beds/Baths 3/1.5
Mo. Rent 950.00
Mo. Principal 348.04
Mo. Taxes 25.00
Mo. Insurance 41.67
PITI monthly 414.70
Income/Expenses (Year)
Gross rent 11,970.00
Taxes 309.00
Insurance 500.00
Property Mgmt 957.60
Vacancy/Repairs 1675.80
Net Operating Income 8527.60
Net Mo. Cash Flow 363.35
*(this has lower taxes, yet higher operating income than #1 with higher Net mo. cash flow)
#3 Ginger Snap Cove, Memphis 38125
Purchase Price 145,000
Down Payment 29,000
Est Closing $ 7,250
Coordination Fee 3,500
Total Out of Pocket 39,750
PM Setup/Misc 2,500
Yr Built 1993
SqFt 2253
Beds/Baths 4/2.5
Mo. Rent 1300.00
Mo. Principal 631.60
Mo. Taxes 111.00
Mo. Insurance 60.00
PITI monthly 802.60
Income/Expenses (Year)
Gross rent 16,380.00
Taxes 1398.60
Insurance 720.00
Property Mgmt 1310.40
Vacancy/Repairs 1310.40
Net Operating Income 11,640.60
Net Mo. Cash Flow 344.00
*(error in that prop mgmt & vacancy/repairs are =, also that
vacancy/repairs on this property are just 8%)
#4 Vestry Place, Indianapolis 46237
Purchase Price 87,900
Down Payment 17,580
Est Closing $ 4,395
Coordination Fee 3,500
Total Out of Pocket 25,475
PM Setup/Misc 2,500
Yr Built 1998
SqFt 1038
Beds/Baths 3/2
Mo. Rent 975.00
Mo. Principal 382.88
Mo. Taxes 50.00
Mo. Insurance 41.67
PITI monthly 474.55
Income/Expenses (Year)
Gross rent 12,285.00
Taxes 618.00
HOA 132.00
Insurance 500.00
Property Mgmt 982.80
Vacancy/Repairs 1474.20
Net Operating Income 8578.00
Net Mo. Cash Flow 333.45
*(Vacany/Repairs 12%)
#5 Lauren Dr, Bartlett, TN 38133
Purchase Price 140,000
Down Payment 28,000
Est Closing $ 7,000
Coordination Fee 3,500
Total Out of Pocket 38,500
PM Setup/Misc 2,500
Yr Built 1997
SqFt 1562
Beds/Baths 3/2
Mo. Rent 1300.00
Mo. Principal 609.83
Mo. Taxes 149.42
Mo. Insurance 60.00
PITI monthly 819.24
Income/Expenses (Year)
Gross rent 16,380.00
Taxe 1,182.65
Insurance 720.00
Property Mgmt 1310.40
Vacancy/Repairs 1310.40
Net Operating Income 11,156.55
Net Mo. Cash Flow 327.36
*(again error in that mgmt is same as vacancy/repairs-hmmm, same mistake twice is worrisome, also vacancy/repairs are just 8%)
#6 Millers Glen Way, Memphis 38125
Purchase Price 105,000
Down Payment 21,000
Est Closing $ 5,250
Coordination Fee 3,500
Total Out of Pocket 29,750
PM Setup/Misc 2,500
Yr Built 2004
SqFt 1348
Beds/Baths 3/2
Mo. Rent 1050.00
Mo. Principal 457.37
Mo. Taxes 80.83
Mo. Insurance 50.00
PITI monthly 588.20
Income/Expenses (Year)
Gross rent 13,230.00
Taxes 999.10
Insurance 600.00
Property Mgmt 1058.40
Vacancy/Repairs 1058.40
Net Operating Income 9514.10
Net Mo. Cash Flow 337.90
*(AGIAN same error in that mgmt is same as vacancy/repairs- same mistake three times is really not so great, also vacancy/repairs are just 8% again)
If you've taken the time to get through all this, I can not thank you enough!