Hi everyone, I've been lurking the forums reading as much as possible and this has been a great tool. I'm looking in to purchasing my first property and was looking for some feedback.
It is a 4plex 2-2bd & 2-1bd. All units rented out
Price-$110,000 Looks fairly updated so not expecting any improvement costs and purchase. 20% down 30 yr fixed
Rent -$2270 10% vacancy
Using 50% rule it would cash flow $681/mo Owner pays heat & water
1. Would 50% be to low with paying heat & water?
2. Value of property has dropped from 150k in 2011 to 130k in 2014, should i be concerned?
Thanks for your input
Wish I could find something like that here!
I almost feel like this is to good of a deal but the outside of the property looks good, no problems from what I can see. With this being my 1st property I'm being overly cautious.
Try to get a better handle on expenses. You have tax and insurance, Maintenance/cap. reserve of $4,000+,management of 10%+, and your utilities.
I have never been able to buy properties at 2% of rent. The best I have done is about 1.7% and my threshold is 1.33%. It looks like you may have a great deal.
Taxes last year was 4900. I'm waiting to get copies of utility bills.
No, in this case the 50% rule won't work, you're at 18% alone just for the property taxes... add in utilities which can be a killer and you'll likely be closer to 60 - 65% expenses which is probably why the price is where it is.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!