First Property, 6 Unit
Hello everyone,
So I closed on my first property in Aug and wanted to post it to see what everyone thinks. A little about me though: I am active duty military, currently out of the country so I managed this whole deal through a lawyer and real estate agent. I took the better part of a year to close, but luckily In the end I managed.
The property was not taken care of by previous owner (also an out of town LL) but I think I can make the difference because in town their are only a couple of PMs and they are just awful. My PM was my RE agent who wanted to strike out on her own, so this is only her second full time property all to herself, she is motivated.
I purchased with 2 units empty, and one only paying $225 a month as he was supposed to be on sight PM. Last month we had one eviction and raised rents to market rate .
The details:
Description: 6 unit apartment building. Grade C Neighborhood. Full occupancy as of 1 Oct 15. All expenses rounded up to nearest $100 based off 3 year historical prices. Numbers are very conservative based on worst case scenarios.
Assessed market value = $135,000
Offer accepted= $105,000
Cash out of pocket (30% down/legal fees/closing costs/taxes/insurance - $4000 sellers credit for repairs/security deposits)= $41,832
Total financed 5/20 ARM @ 5.5%= $69,752.70
Yearly Income = $42,360- 10% vacancy = $38,124.00
Yearly Expense + Debt Service= $32,640
Free Cash Flow yearly= $5,484
Monthly Income Monthly Expense
#1= $750 Debt Service (inc. taxes& insurance) = $920
#2= $650 10% rent Property Management fee = $400
#3= $500 Gas&Electric = $600
#4= $400 Water&Trash= $300
#5= $500 Property Maintenance, repairs & upkeep= $500
#6= $680
TOTAL MONTHLY= $3530.00 TOTAL EXPENSE MONTHLY= $2720
All in all I feel I learned a heck of a lot on this first go around, and can't wait to keep it up. I know of several other out of country investors, and would love to get any feedback on how they do it/ways to make life easier.
Thanks!!
Greg