All Forum Posts by: Alex Johncock

The utilities estimate is only including the water, sewer and trash. The gas and electric is completely split and is paid for by the tenants. What else about the building should I be considering?

I know the furnaces are 9 years old, and the roof is 10 years old. House was painted 4 years ago.

Hi guys,

I've got a potential deal that I can't make a decision on. Based purely on the numbers, would you buy this? Why or why not? Thanks in advance!

Here's the spreadsheet:

https://www.dropbox.com/s/xip0fk2p2v6rcoe/Woodward.xls

Thanks for your input Brandon!

I have not as of yet been in either of these properties. I've met with two realtors so far and have a meeting with another tonight. I'm trying to find one that is knowledgeable on the concepts and numbers of cash flow properties. Whether tonight goes well or not, I'll schedule viewings soon.

As of right now, I know the Westnedge property had a new boiler put in just about a month ago, and the Woodward property has separate furnaces for each unit which have been replaced within the last 10 years.

I have driven the neighborhoods. My girlfriend actually lives about 4 houses down from the Woodward property so I drive by it many times each week. The areas of both are quite good. They're in areas where I think it would be possible to get a mix of both Western/K College students, or longer term renters.

Thanks for the thoughts!

Good points Erik.

You're definitely right about the exterior repairs in the historic district. I know there are fairly tight restrictions here. I'll try to look into it further.

As far as the sewer and water, it does seem cheap now that you point it out. I don't have the documents here with me, but this info was shown on the MLS when I looked over it with the realtor. I'll definitely double check it and verify. Thanks for pointing it out.

Thanks Karyn.

Yes, things have to be up to code here in Kalamazoo. All rental properties have to be certified every two years or so. These certifications are fairly stringent so most of the properties in the area have been pretty well kept over the years.

I'll have to check both of these, but many of the rental properties for sale in the are list when their certification is good through. I'd still have to make sure that nothing has changed/degraded that would cause issues with future certification so it's a good thing to keep in mind.

Thanks!

That's an idea I hadn't thought of. I just wanted to make sure I had some safety factor in somewhere. I'll do that! Thanks!

Thanks for the input Robert.

I would plan on having enough cash left after buying the property to establish some sort of "emergency fund" for the property and then always keep enough of the cash flow in reserves to handle future issues.

The vacancy rate in the area in the area is in fact much, much lower than the 15% I have estimated. On the duplex, I happen to know the current property manager who said it has been actually 0% in the last 3 years. I'm just trying to account for time left empty if I need to do repairs or updates myself between tenants.

Thanks for the recommendations about offers. I'm definitely not afraid to try offering lower, I just figure that these owners must have had offers in the past and must be sticking to their number, thus the properties being on the market for so long. Just an assumption.

Thanks again.

Thanks for the input!

The 15% is definitely designed to have some safety factor in it. Although I plan to manage myself for at least the first few years, I may eventually want someone else to manage it, thus I have factored that into the analysis. Even with these, the cash flow per month per unit doesn't seem bad on either property.

What do you usually aim for in terms of cash flow per month per unit?

Hello all, I'm new to real estate to the bigger pockets forum, but have listened to many of the podcasts. I've been doing reading/research on real estate for about a month now and I'm interested in getting some analysis feedback from some more experienced folks.

I have found a couple of properties in my hometown (Kalamazoo, Mi) that seem like the numbers work. In fact they're good enough (in my maybe naive opinion) that I'm wondering if I'm doing something wrong. Both properties have been on the market for months, so I've got to be doing something wrong right? I'd love to hear your $0.02.

Just a brief history on the the area. The area these properties are in is a "historic district". Most of the properties in the area were built in the late 1800s or early 1900s and the two in question are no exception. They were both built originally as single family homes and have since been updated/converted. One is a duplex, the other a fourplex.

Here are the numbers in a screenshot for lack of better way to do it.

https://www.dropbox.com/s/z19cp5rau1qyyv3/Westnedge.tiff

https://www.dropbox.com/s/0xzceriju9lr5lm/Woodward.tiff

Are my estimates way off? Am I missing something entirely?

What do cash-flow investors usually look for for monthly or yearly returns?

Any guidance anyone can provide would be great. Thanks in advance!!