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One unit is currently vacant and I would move into it for 1 year, as an owner/occupier with a 3% down payment, while hacking the other bedroom for $500/pm (4plex has 2 br each). One unit is rented for 950, 900 and 850. It seems eventually rents can be raised to 950 atleast. My report here is based on 2nd year after I move out, assuming rents at $950/unit, and the numbers look brutal (I am not sure if I did this correctly). My main goal is ensuring positive cashflow than appreciation for now. With this info, I am not sure how to consider or work out this deal in the first year and the years thereafter, to make sure this deal is worth pursuing. Is it possible to make this work, how would you do it?
Realtor · Dallas - Fort Worth Metroplex, TX · Member since 2016 · 1k+ posts · 925 votes
6y
@JayCinta Henry . Is this a wholesale deal or from the MLS? Does it need work? Do you have the comps for the area - both from a sales perspective and market rents?
Your query about charging the Tenants for repairs - probably not; it depends on if they caused the issue at hand? if it's general repair and maintenance that would fall on you. Have you seen the leases for the current tenants?
Investor · Mesquite, TX · Member since 2019 · 111 posts · 15 votes
6y
Thanx everyone for all your great info. I spotted this on MLS, no work is needed. I don't have either comps yet, nor have I seen the leases yet. I know this area well and $950 min. is just about right but that's on the check list for verification. I am also awaiting insurance estimate.
What would be your max offer, to ensure the deal makes an investment sense?
Secondly what amount would be reasonable to ask a renter to pay for the first so much of repair costs?
I will pay up to 60 X monthly rent for a property in rent ready condition in a C+ or better neighborhood. If it needs 10k in repairs then I subtract 10k from my 60 Xs.
In your last question are you asking how much you should charge for a security deposit? I think somewhere around 1 months rent is common.
What would be your max offer, to ensure the deal makes an investment sense? "
Secondly what amount would be reasonable to ask a renter to pay for the first so much of repair costs?
I will pay up to 60 X monthly rent for a property in rent ready condition in a C+ or better neighborhood. If it needs 10k in repairs then I subtract 10k from my 60 Xs.
In your last question are you asking how much you should charge for a security deposit? I think somewhere around 1 months rent is common.
Appreciate that 60x rent insight. Now then $950 x 4 x 60 = $228k. Did I get that right? I see county tax estimates at about so, but a unicorn in the DFW market right now, generally, for such.
I used to live in Wichita KS, hanged out in Topeka, Manhattan, Eldorado, KC, etc. but I wasn't in RE then. Is this what you are getting over there? I have been looking that ways actually, to IN, OH.
What would be your max offer, to ensure the deal makes an investment sense? "
Secondly what amount would be reasonable to ask a renter to pay for the first so much of repair costs?
I will pay up to 60 X monthly rent for a property in rent ready condition in a C+ or better neighborhood. If it needs 10k in repairs then I subtract 10k from my 60 Xs.
In your last question are you asking how much you should charge for a security deposit? I think somewhere around 1 months rent is common.
Appreciate that 60x rent insight. Now then $950 x 4 x 60 = $228k. Did I get that right? I see county tax estimates at about so, but a unicorn in the DFW market right now, generally, for such.
I used to live in Wichita KS, hanged out in Topeka, Manhattan, Eldorado, KC, etc. but I wasn't in RE then. Is this what you are getting over there? I have been looking that ways actually, to IN, OH.
Yep, you did the math right. There aren't properties every day around here that I get for those numbers but I can usually purchase 4-6 a year. I understand that most markets don't support the way I invest. I am going to have a tough time when I decide to invest outside of my local market.