Basement unit rent-$415 a month-7+ year elderly tenants
1st Floor-$550 Rent
2nd Floor-$550 Rent
Total=$1515 a month/$18,180 per year-This will pretty much break even only with the basement rented.
Monthly Insurance-$85.00 Replacement cost value 2484 sq x $65 a foot
Grass-$30 a month
Water/Utilities/Garbage-Roughly $150 a month
Property is under professional management charging $500 for tenant placement first month and 10% per month to collect rent, manage, place tenants, do repairs and bookkeeping etc.
Property has had $4000 for tenant make ready when I got it last year
1 unit had new floors installed in the bathroom recently-around $1000
Property is free and clear
asking price is 30,000
should i buy this one and do the numbers seem good enough?
From what you are showing here it seems like a no brainer. The Cape rate is over 16. Down here the average is 5. But, I think there may be some expenses that you did not include, maintenance and vacancy. I assume you are buying cash since there wasn't a mortgage payment listed.
Do you plan on improving the property when there is turnover to raise the rents? If so, you would have to consider the cost and the new income.
I would verify the rent rolls, utilities, and do a thorough inspection.
Agreed with Adam above, numbers seem pretty good. Be sure you're comfortable with the area - you're buying in Gary, IN and you live there as well, so sounds like you know the neighborhoods. If you're close by, you can probably manage it yourself and save the property management expenses too.
That would be the key concern. Gary Indiana has been known to be the murder capital of the US in various years - most recently in the 90s. I know its said to be a bit better. But yikes. I'm not sure how fun it will be collecting there.
Thanks everyone for your input. I chose to pass on this one. Nothing to do with the neighborhood since i know it very well. The seller didn't seem to honest as to why he was selling the property and that concerned me allot seeing that would have been my first ever investment property. I will continue to look for the better deals and hopefully something comes up...
Im 8 months late here, but interested in knowing if you got around to making a Gary, IN deal happen. I recently purchased a sfh there to house have for 12-18 months while I put funds together for next property.
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