Dayton (Kettering) 4-plex deal analysis

6 Replies

Hello BP members!

I have been eyeing some 4-plexes offered by a turnkey company in Dayton. 

Here is an example of one:

514 Wiltshire Blvd, Kettering OH 45419

Its 4 1bd/1ba rooms

I want to get everyone's opinion on how good a deal this is. I would be responsible for water, trash and yard maintenance. Turnkey company assessed this cost as 1800 a year. Is that too low? Here are the numbers I crunched. 

Taxes $294.08
Vacancy (7%)$147.00
Repairs/capex (10%)$210.00
Prop Mg (12%)$252.00
Total expenses$1,785.41
Income w Mortgage$314.59
Income wo/ Mortgage$980.25
Cap Rate7.59%
50% rule$384.34

Note quite 100 a door, but appealing to me given the good school districts and location. 

How much did you figure for closing costs, loan down payment, interest rate, term?

I ran the numbers with 15% down at 4.5% and 2% of sale price for closing costs to match your $665 mortgage payment and I'm seeing 8.4% cash-on-cash with a monthly cashflow of $184 which is $46 per door.

I think the difference between your numbers and mine is you did not count the 1800 annual for utilities.  Let me know if I missed anything.  Do these numbers meet your objectives?  If so seems like it could work.  12% property management seems a bit high for multi-family, I usually see people talk about 7-10%

@Aamir Shah , it's not a "deal", if $155k is market value

Hint: look up what it sold for last time, recently. Is $155k more than market value? 

[Oh, I've done that for you: It didn't sell at $134k at the height of the selling season last Summer, but now they want $20k+ more, in Winter?]

That's not to say there's no money to be made. But, if others are getting more than $100/m per door, then why aren't you looking for that too, right? [But if you've been convinced by the location and schools, am I wasting my words?] 

I can't speak as to whether $1800/y is too low for water, trash and yard maintenance, but given who's telling the story, what do you think? Good luck...

I think $150 for water, sewer, trash and lawn maintenance is too low.

Property taxes have been raising the last couple of years and will again next year. Have you already accounted for this?

As mentioned before, at this price it’s not a great deal. You’ll look to be happy to break even with the slightest thing go wrong. 

There are better opportunities in the Dayton area. Maybe not the same great schools, but for apartments like this I feel schools are less important. You generally don’t rent 1 bedroom apartments to families with children.

Run or offer a LOT less money.

Way to many cash flowing deals in Dayton to get burned by this mess. 

I've seen this property sitting there for a few weeks. I haven't been able to get the numbers to work out for 155k either.

You guys are awesome thanks.

@Derek Kirkwood the math is based on a 20% down mortgage . The 1800 annual utilities are named poorly above (as maintenance). I did 12% prop management because there is a fee to place new tenants and that can really eat up profits (usually costs one month rent on top of the 8%)

@Brent Coombs good points. I have yet to find 100/m per door unless I am going to C-D areas, I guess I need to keep looking

@Tommy Spijkers also good points. When I buy homes in California I always consider school district - maybe I have to get out of this mind set. Do you know which areas in Dayton are good for rentals. I really just want low maintenance tenants who dont smash holes in my walls in anger over an eviction

@Nathan Rude yep I think there was a price drop also (used to be $160something)

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