How did I do?!?!

Question

This is the deal...4 Unit building, well actually 2 two family building on one lot. Price $285,000 rents total $3100.

I just found this website last week and there is a wealth of information but I wish I had found it before I got into this deal, with all that said, is this a bad deal or did I do alright?

Mike

Mehran K. · Answer

If the numbers provided are accurate and actual, it seems like it is a good deal.

Are you ready to be a landlord and have your tenants live next to you?
Did you check the rent rolls for the past few years?
Review the leases of the tenants living there right now.
Don't skimp on a professional property inspection prior to purchase. Don't rely on your own eyes.
Get familiar with landlord-tenant laws in your City/State.

Mike Hoefling · Answer

Understood.  Unit #4 is $100 below market value rent in its current condition. Could rent for more with some tasteful updates.

Mike D. · Answer

Mike,

Most people on this site factor in all units in situations like this to evaluate the deals potential despite the fact that you will be occupying one of the units . So 3,100*.50 = 1,550 available for debt service. Based on your numbers and the generally accepted 50% rule, the true cashflow(fully rented) is 333/month.

1,550 - 1,217 = 333 fully rented cashflow

Most people on this site shoot for 100/unit

How far below market value is unit #4?

Mike Hoefling · Answer

The current plan is that I will live in one of the units which will cause the cashflow to be less. Currently, there is no deferred maintenance that I can see the place is in great shape.

4 Units @ purchase price of $285,000
Mortgage: $1217.87/Mo
Homeowners Insurance: $183.33/Mo
Taxes: $456.14/Mo
Mortgage Insurance: $306.58
Water: $95.XX

Total: $2258.92

Rents
Unit 1: $1000
Unit 2: $900
Unit 3: Occupied by myself (previously $700)
Unit 4; $500 (below market value)
Total: $2400

Cuurent Cash Flow: +$141.08
Fully Rented Cash Flow: $841.08

Does that look right or am I figuring this wrong?

Mike

Kyle J. · Answer

Hey Mike, nobody will be able to answer that question without much more information (i.e. expenses for the property, your expected/actual cashflow, amount of rehab/repair work that will be needed - if any, etc etc etc).

Charles Morgan · Answer

You will want to provide a bit more information, Mortgage cost, taxes, etc. in order for the spreadsheet people to come up with hard numbers.