All Forum Posts by: Alex R.

Hello Sam

Are your properties cashflow positive or negative ? Because if you are still paying mortgage for them, I can't see how can they cash flow with these high expenses.

also I was wondering about your vacancy rate as well. I can imagine cleveland area having a way higher vacancy rate than california.

Is that one reason for your high expenses rate ?

at 128 K this will pass the 2% rent criteria but that is a far cry from the asking price of 225k.

I wonder how seller will feel about an offer this low !

Andrew

It seems to be a good option for me to move in one of the units. Not only it will be a good learning course for me but also I can save on property management costs, qualify for a way lower down payment, better interest rate and better loan in general, also not paying rent for a one bedroom apartment I currently own.

On the flip side, it may be a little hassle to live in a property as such and sharing a wall with your own tenants. But it may be well worth it in the long run.

Mehran

I just read your profile and I highly suggest you read this:

http://en.wikipedia.org/wiki/Analysis_paralysis

this is a percentage that seems highly unlikely and unrealistic as seller states the expenses at $ 185 and yours is 7 TIMES HIGHER at $1280

I just don't see how this property can cost this high unless there is something seriously wrong with it which has not been disclosed yet.

But 50 % is still an unrealistic estimate nevertheless.

if I live in one of the units:

what will be my down payment and what interest rate will apply to my loan ?

Realistically speaking

how is financing for a multi-family unit different from a conventional loan ?

So here I do some due diligence. Are these calculations correct ?
How bad “extra” expenses can be?

**************************************

Based on the numbers above,

the monthly income of this property is: $2560
Purchase price: $230k
Down payment: $23 k
Rate: 3.466%
Principle and interest: $ 926
Tax: $216
Homeowner ins: $67
Mortgage Ins: $102

Monthly Payment: $1310
Monthly expense stated by seller: $ 185
Monthly expense NOT stated by seller: $ 200

Total Monthly Payments: $ 1695
Monthly Net Income: $ 865
Yearly Net Income: $ 10380
ROI : % 45

I came across this listing on MLS and was wondering if this is a good deal to buy and rent out ?

Are banks going to finance this?

“””Great 5 unit property across the street from Medical Hospital. Includes 1 3 bedroom 2 bath unit, 2 studio units, and 2 1 bedroom 1 bath units. Perfect for investors! Drive By Only, do not disturb the tenants!””””

Statues: Active
Year Built 1932*
Income/Expense Info Actual
Total Number of Unit 5
Zoning C-1
Annual Gross Income $30720
Vacancy Factor 1.00%
Cap Rate % 0.13
Total Annual Expense $2224.08
Annual Net Income $28495.92
Parking Uncovered

Also expenses are only about 7% of gross income which is in huge conflict with 50% rule seen in this forum. (Numbers are actual and not proforma)
So my question is is this a great deal even though it doesn’t pass the 2% or 50% test ?

Interesting point J Scott

So trustee sale means property is being auctioned off at court steps ?