Potential Deal in Kingston NY

7 Replies

Hi,

I've been following Bigger Pockets for a few months now and am analyzing a potential first deal with two trusted partners. Here are the numbers:

2 family attached, 3bd/2ba

currently generating $2000 / month to month collectively with 6 tenants total.

(Note: most are students and bachelors)

Strategy: buy and hold

$239,900 asking price (realtor and zillow says its high)

$200,000.00 sales price (the price we'd start bid with)

$179,925.00 loan amount (25% down due to legalities of FHA rules)

$820.00 approximate monthly payment with 3.7% at 30 years

$7000 taxes per year (roughly)

$2000.00 insurance per year (realtor provided estimate)

$1450 rent income for each unit (market rate based on rental comps in the area)

Is this a good deal? Thank you in advance for your help!

583

166

820

= 1570 

430 cash flow

That isn't accounting for vacancies, property management feeds, maintenance, or repairs

It looks to me like it cash flows pretty well.

Run the numbers again and the comps to be sure that is the going rate.

Thanks @BrentP4 ! I thought it was a pretty good deal. We plan on cutting out property management costs to start and pull in someone as needed to be our "boots on the ground". The neighborhood is mostly residential but it is riverside and has a strip of restaurants and tourist attractions within walking distance of the property. However Zillow estimates that the place is worth only 215,000. We'd like to come in low and see how the owner responds. We are looking at comps of properties in area, but we don't want to go above $210K in our offer, since the place needs plenty of cosmetic work. Here is a better look at the numbers:

Cash flow:

210K purchase price with a 30/yr fixed mortgage at ~4.25.

Rent - Mortgage - Insurance - Tax - Vacancy(10%) - Maintenance(10%)

(1400*2 = 2800) - 774 - 166 - 583 - 280 - 280 = $717

Cash on Cash return (initial):

717x12 = 8604 / 55,000 (down-payment + rehab) = %15.6

Natalie-

I am a Kingston High graduate who has lived in SC the last 8 years and have recently returned to the area. I am looking for my first rental in Saugerties due to logistics.

I have a friend who has helped me analyze properties and we use the classic 50% rule conservatively. Running the #'s you provided you get 2800*.5-774=626

Kingston has high expenses and taxes compared to several other areas. Please note that. I would take your 626 and round back to $550. I'm a newbie too so take my advice with a grain of salt. A constant theme in these forums seems to be conservative estimates and that also appears to be a common ingredient to success.

Regards-

Jesse

Thanks @JesseRayShort! I will take your estimates into consideration. Even with the conservative estimates, the deal is pretty good no? 

626*12=7512/55,000 = 14%

My main concerns with the property are vacancy and keeping the current tenants, who seem to not be caring for the property very well. My partners disagree on the latter currently.

Originally posted by @Natalie Olivo:

Thanks @Brent P4 ! I thought it was a pretty good deal. We plan on cutting out property management costs to start and pull in someone as needed to be our "boots on the ground". The neighborhood is mostly residential but it is riverside and has a strip of restaurants and tourist attractions within walking distance of the property. However Zillow estimates that the place is worth only 215,000. We'd like to come in low and see how the owner responds. We are looking at comps of properties in area, but we don't want to go above $210K in our offer, since the place needs plenty of cosmetic work. Here is a better look at the numbers:

Cash flow:

210K purchase price with a 30/yr fixed mortgage at ~4.25.

Rent - Mortgage - Insurance - Tax - Vacancy(10%) - Maintenance(10%)

(1400*2 = 2800) - 774 - 166 - 583 - 280 - 280 = $717

Cash on Cash return (initial):

717x12 = 8604 / 55,000 (down-payment + rehab) = %15.6


Thanks @Brent Paul ! I thought it was a pretty good deal. We plan on cutting out property management costs to start and pull in someone as needed to be our "boots on the ground". The neighborhood is mostly residential but it is riverside and has a strip of restaurants and tourist attractions within walking distance of the property. However Zillow estimates that the place is worth only 215,000. We'd like to come in low and see how the owner responds. We are looking at comps of properties in area, but we don't want to go above $210K in our offer, since the place needs plenty of cosmetic work. Here is a better look at the numbers:

Cash flow:

210K purchase price with a 30/yr fixed mortgage at ~4.25.

Rent - Mortgage - Insurance - Tax - Vacancy(10%) - Maintenance(10%)

(1400*2 = 2800) - 774 - 166 - 583 - 280 - 280 = $717

Cash on Cash return (initial):

717x12 = 8604 / 55,000 (down-payment + rehab) = %15.6

Hi Natalie, I'm curious, did you buy this property and how did it go?

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