Check My First Deal!
Alright guys, I'm going to check this place out on Wednesday and most likely put an offer on it after that. I went to see it a few months ago, but thought I wasn't ready for such a "big" deal at the time. Currently waiting on my pre-approval letter.
The deal is as follows:
Specs: Four units, two side-by-side duplexes. All units are 2x2 with a basement that can be utilized as an additional bedroom + a 1 car garage. I will occupy one of the units.
Asking: $310,000, on the market for over a year
Offer: $260,000 hoping to negotiate down to around $280,000 - $290,000. Ran the analysis at $290k with around $5000 closing costs and inspection fees, but plan on having the seller pay for CC if they don't budge on the price.
Would like to put 5% down, but lender asked for 10% for them to finance since my commission income last year isn't as pretty as this years. I ran the deal with 7.5% down on the BP calc.
FINANCIALS
Down Payment: 21,750
CC & Inspections: 5000
Cash Needed: 26,750
Monthly Expenses
P&I: 1453/mo
T: 208/mo
I: 115/mo
PMI: 175/mo
PM: 232 (I will attempt to self-manage for as long as possible)
Vacancy @ 5%: 116/mo
= $2299 monthly payment with PM, $2067 without PM in place.
I figure cap-ex and maintenance will happen, and we don't know when.. as something could happen day 4 of owning the property. So I will have cash reserves set for the property.
Current Rents
Unit 1*: 615 Unit 2: 775 Unit 3: 775 Unit 4: 600 (Will occupy this one)
= $2165 monthly rent
* I plan on upping this to 775 once in my possession, and eventually increasing all of them to 850 once it's turnover time. <-- any advice on increasing rents would be great.
Future Rents
Once I move out and all of the units are rented
Unit 1: 850 Unit 2: 850 Unit 3: 850 Unit 4: 850
= $3400 monthly rent
Let me know if this sounds like a good first deal to you. I am always open to advice and constructive criticism. Thanks all.