*This link comes directly from our calculators, based on information input by the member who posted.
We are looking into purchasing our first property and it's a fourplex. We will be living in one unit but are calculating it based on being fully rented. The loan is a VA loan so 0% down. Asking price is $285k but calculations are based on $240k. Utilities and rents are based on what current owner pays/receives. It seems we would just about break even at that price but I'm trying to figure out if my calculations are correct or if I'm over/under or missing something entirely. Thanks for help/input!
I'm just starting out myself, but it looks like you won't really be cashflowing much. The plus side is you won't be paying to live there. From what I understand, you should cashflow $100/door minimum so a 4-plex would be $400 month. Taking into consideration that they are renting for $700.00 month, you are making the money if you account for what you would be "spending". If you are accounting for the $700 month rent for all 4 apartments though, you are losing money because you are "showing income" for your apartment, and that is a bad deal imo. Hopefully someone else will answer.
@Daniel J Aldrich thanks for the reply! I know we will be "losing" money at first since we won't be renting the fourth unit out as living there is a VA loan requirement but the mortgage will be paid by the other three units with some left over. We also aren't offering $240k I'm just using that as our "break even" so to speak. I'm not sure how close we'll get to $100 per door since we aren't putting a down payment either.
I don't know. I still think your cash flow is still really low. By not putting any money down your cash on cash return should be higher I think too. Like I said hopefully the experts chime in
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing