Updated almost 10 years ago on . Most recent reply
Four-Family Analysis
I currently have a 4 unit house under contract in the small city of Willimantic, CT. I have run my own numbers on this property, and am confident moving forward, but I wanted to put it out to the forum incase I overlooked something. I am planning on using a 203K loan to wrap in rehab costs. The property is in rentable condition.
Agreed Upon Price: 146000
Wrapped in Closing costs :5000
Total Loan:145,700
Monthly Expenses (Tenants Pay Utilities)
Principle and Interest ( 3.8% for 30 years): 690
Insurance: 200
Taxes: 303
MPI: 104
8.3% Vacancy: 228
Cap Ex 8%: 220
Maintenance 8%: 220
Property Management 10%: 275
Water and Sewer: 50
Total Monthly Expenses: $2,290
Gross Monthly Rent: $2,750
Total Monthly Cash Flow = $460
Total Annual Cash Flow = $5,520
1 year Cash on Cash Return = 62.13%
Total Cash Needed = $8,884
Down Payment = 5285
Closing Costs= 2575
Title Insurance= 600
Pre-Paid Tax= 2424
Pre-Paid Insurance= 3000
Wrapped CC= -5000
Does my math make sense to you? I left out the rehab part of the 203k, because I am still deciding what work to do.
Here are my considerations for work to do....
Update original windows (functional, just not efficient (tenants pay utilities))
Lally Columns replacements for wood supports
Roof? (<5 years left)
Electrical Repairs/Updates (necessary)
Fire doors
Structural carpentry- about $2000 worth
Which of these items would you suggest I wrap into the loan. I have mixed feelings, but would like to get an outsiders input.
I'd appreciate any thoughts, suggestions, corrections.
Thank you,
-Jacob