Chicago Frame 2 Flat - How do my #'s Look?

2 Replies

Hi all,

I have this property under option, but before market it, I'd like to check the #s with you all because it doesn't meet the 70% rule, which I had previously been going by.

I'd love to know your thoughts! Thanks!

Description:

5 bed / 2 bath Frame 2-Flat about 1200 sqft with unfinished attic

I have this property under option. Offering it at $45k.

Worth: 80k

Repairs: 20k

Asking: 45k

Repairs:

Paint (interior and exterior)

Carpet

Roof

Kitchen remodel

Bathroom remodel

Minimal Drywall Repairs

You may want to replace a couple of windows with high efficiency windows

Rentometer: $1700/mo median rent ($700/mo 2 bed, $1000/mo 3bed)

Questions:

For all you landlords out there.....

1. What discount do you like to buy at for rentals?

2. What criteria do you use to evaluate rentals in today's market?

3. Do you go by a certain % of purchase price? 70%? 80? Minus repairs?

4. Rents for 1-2% of purchase price?

5. What minimum cashflow do you require?

6. Do you care about cap rates and cash on cash return?

7. What #'s do you look for in CCR and Cap Rate?

***It doesn't meet the 70% rule, so it's probably not as good for a Fix and Flip as for a rental: but it'll cashflow over $900/mo with a 17% Cash on cash return for a Landlord to Fix and Hold. See Cashflow Analyzer below.


51stStCashFlowAnalyzer05.21.14.png

I appreciate any input!

Thanks to @Wendell De Guzman for the Analyzer which you can find here: http://www.biggerpockets.com/files/user/Mister4closure/file/wendells-simple-cashflow-analyzer


@Ana N. Where is the property located?

I'm assuming that you need to replace both kitchens and both bathrooms, with a roof? I think 20k may be too low.

1. Discount is worked into CCR.

2. Going CCR for the neighborhoods I am in.

3. Nope. I have an idea on what price I want to pay per unit, which ties back into my CCR numbers.

4. Depends on location. I have some where 1-1.5% is great. Some where 2% is a must.

5. CCR

6. Almost the same, Depends on my leverage.

7. Depends on location.

Hi Cliff,

Thanks for for the input.

The property is in Back off the Yards / New City neighborhood. This is a moderate income working class neighborhood.

What neighborhoods do you buy in?

What CCR do you look for generally?

In what types of neighborhoods do you look for 1-1.5% vs 2%?

Thanks!

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