[Calc Review] Help me analyze this deal. Closed on yesterday

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  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    8y

    @Joshua D. are your numbers correct?...you're buying a $6,000 property with a loan?...it's nearly impossible to analyze any $6,000 deal...your numbers are going to be way inflated....that's why your CoC is 400%...and capitalizing any property with less than 5 units is really foolish..not sure why BP has this in their calculator...anyway, if your income is correct, this is ridiculous for cash flow, but an ARV of $25,000?...I just don't understand.

    If you PM or send me the address I can likely assist further. 

    937-979-7000
    Realize Multifamily Group11 Review
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  • Joshua D.Pro Member
    OP
    Rental Property Investor · Pittsburgh, PA · Member since 2015 · 712 posts · 173 votes
    8y

    @Brandon Sturgill  Yes Bought it with my line of credit. Property is worth between 25-35k just was being conservative. Might be best deal ive got so far haha from a cashflow and roi point of view right? What do you mean capitalizing any property with less then 5 units is foolish? Its also a duplex with attached garage.

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  • Josh Dillingham
    Rental Property Investor · Brattleboro, VT · Member since 2015 · 204 posts · 174 votes
    8y

    @Joshua D. based on those numbers it looks like it can work. one concern: even with saving 10% for cap ex that will only be $1400 per year, which could get eaten up quickly if you need a new roof, plumbing, electric, etc.  just because the house is 1/10th the cost doesn't mean the repairs will be 1/10th as expensive.  It's crazy that you are getting $1150 in rents for a $7,000 all in property but good for you.  Personally I wouldn't do this deal because $340 of monthly cash flow isn't enough for me to have to worry about owning two more units.  I like to get at least $200 per door.  But at the price you are paying you don't have much to loose and if all goes well you'll have an excellent return on your investment.

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  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    8y

    @Joshua D. Maybe just a pet peeve, but I don't understand the concept. It's just not how the financial world looks at investments...CAP is a component of "commercial" residential multifamily...5+ units. 1-4 unit properties are often classified as single family (This is how Core Logic classifies 1-4 units)...The properties are valued by comparable sales method. Calculating returns on small multifamily like this is only for our personal knowledge...it has nothing to do with actual value.

    937-979-7000
    Realize Multifamily Group11 Review
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