Rental Property Investor · Cleveland, OH · Member since 2015 · 21 posts · 10 votes
I am in the process of negotiating the purchase price of my first multi family home. I've run every algorithm that an individual could recommend, and all seem to check out. Is there a simple and effective way to analyze a property, or is calculating the cap rate, 1% rule, 50% rule etc, cash on cash, NOI, all necessary? Looking for some insight.
Background:
Excellent location
Duplex- $1,500 per month gross
3900 sq ft 8 bedroom home 3 bath
Current negotiation at $83,000 (closing costs included)
So this is what my calculator looks like. I just plugged everything into a Google Docs spreadsheet. Excel works too but I prefer Google because its accessible anywhere I can log into my email. Is all this necessary? well not really but it really helps gauge properties against each other and helps me see what will work and what won't. Good luck.
Bill it's in excellent condition, just needs three new windows. I will gladly put the calculator down. Not a fan of math as it is!
2 doors, 8 beds, 3 baths, 3900 sq ft in good shape, very good location for just over 80K with 2500 down? You need to park yourself at the owner's stoop and get that signed! :)
Is there any additional PMI for only putting 2,500 down? Do you have enough money for a 3-6 month vacancy fund? Have you calculated in 1-3% (of purchase price) annually for repairs? I'm not saying it's not going to make money, just make sure you're looking at all the numbers.