[Calc Review] Help me analyze this deal in Ohio

11 Replies

I've got a few observations / questions: 

  • WATER: $100/month for water with 4 units seems a little low. Do you have utility bills or just the seller's stated expenses?  
  • STUDENT HOUSING?  You mention its near the college. Do you foresee it being used by students? If so you may want to budget accordingly for a little more than average on turnover expenses between tenants.
  • PROPERTY MGMT: On property management you've got 10%. Does that account for lease up fees and other incidental charges throughout the year? Depending on your PM company, that could mean an additional 1 month's rent for a lease-up fee, or a portiono thereof for renewals. Depending on the fees your PM charges, it could easily add up to more like 15-18%.

Expenses based on seller stated. Could possibly be student housing, so that’s good to know. Based PM costs on Brandon Turner’s webinars primarily. I don’t think it’s professionally managed now. 

@Dale Matheny - I would look to verify some of the seller numbers, things that jump out at me:

1. Water/Sewer Bill - for a 4 plex this seems pretty low, I pay more than that for duplexes in the Cleveland area

2. Vacancy/Property Management - does this factor in the management costs for renting the unit? if this is student housing you may deal with a higher turn over rate which can increase costs & also have longer vacancy periods... I did a quick zillow search on the address & a number of the rentals in the area have been on the market for >30 days.

3. Utilities - Noticed that you're paying electric - is that right or are the units individually metered?

Hope this helps, this area is pretty rural so hopefully it works out for you.