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Okay I figured out how to add the calculator directly to the post. Just hoping my repairs, cap ex and vacancy are reasonable for that area of Cleveland. Thanks!
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
5y
@P Baxter Hudson $800/mo for each side of a duplex in that price range is not uncommon at all in that area of Cleveland for a place that is rent ready. 44105 is actually not a bad zip code either. I have a couple of units over there in fact.
Ryan....make sure that the property is already rented out with a current paying tenant and make sure you get proof they are paying. If any of the units are vacant then I will give you a word of caution in that from Novenber through March a lot of people do not like to move in Cleveland. I learned that a few years ago out there the hard way.
Cleveland · Member since 2020 · 16 posts · 5 votes
5y
As it is duplex, the owner eats water/sewer/garbage in Cleveland. $150/month should cover those costs.
And, if you can get 3.7% for a 30 year NOT primary residence....damn, bravo - send me a link to your banker! 5-5.5% is going rate for investment properties, even personally backed and kept in your own name - especially out of state. Adjusting there - you'll eat another $150-200 on financing (plus all the closing costs and fees that will come with the purchase of that place that are not included).
And are you sure you'll get $800/unit for only $87K without having to drop at least $20K in fixing up (or more)? That will totally change your numbers. Even if you have a PM on the scene, you'll carry that place for a few months in the beginning - all of that bites into the bottom line.
Prefunding capex and opex at 10% of gross rent are ok placeholder amounts, but that is if the property doesn't need a full renovation to get it headache-free. If you are getting a place on the cheap - especially in today's market, you might have LOADS of work ahead of you in repairs prior to placing a tenant (or 2).
Still workable, but that's what I see from the info you presented. Good luck.
Realtor · Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility · Member since 2016 · 2k+ posts · 2k+ votes
5y
@P Baxter Hudson $800/mo for each side of a duplex in that price range is not uncommon at all in that area of Cleveland for a place that is rent ready. 44105 is actually not a bad zip code either. I have a couple of units over there in fact.
Ryan....make sure that the property is already rented out with a current paying tenant and make sure you get proof they are paying. If any of the units are vacant then I will give you a word of caution in that from Novenber through March a lot of people do not like to move in Cleveland. I learned that a few years ago out there the hard way.
Property Manager · Cleveland, OH · Member since 2020 · 268 posts · 315 votes
5y
Please let us know once you have the offer accepted and rate locked because that is an exceptionally low rate with only 20% down and a purchase price under 100k. I am hearing from most lenders I talk to that they are 25% down right now on an investment property and usually rates at least at 4% when paying 1-2 points. Also you need to include the water and sewer like others mentioned and the closing costs should be ~4-5k (appraisal, title, legal, etc.). Would budget cash out of pocket closer to $27-29k to be safe.
I might have to call Carmela because at those rates it might be time to refi some of my properties.
@Brian Garlington is spot on with verifying that rent is actually collected. They might have a tenant that they are passing off that hasn’t paid in a while and its easier to let them go with the property than to evict them at this point, you don’t want that headache.
Investor · Columbus, OH · Member since 2015 · 134 posts · 48 votes
5y
@P Baxter Hudson We just refi'ed 3 duplex's in our names. 3.62, 3.62, and 3.5 also just purchased a new (to us) 4 plex at 3.5 in Ohio. our mortgage broker is working out of Kentucky.
Cleveland · Member since 2020 · 16 posts · 5 votes
5y
@Sean Dawson - those are really good numbers, well done. With a load of property in the portfolio, you will certainly get a better rate and lenders are showing their love with the great terms you are getting. @Ryan Cleary showed what looked like a 'newish' deal from the original outset and from my last lending sweep I did pre-covid, I wasn't getting any lending love. Glad to hear the banking faucets are opening up for you guys.