Looking for feedback

5 Replies

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

Jason

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.

Good Luck.

Bill

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.

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