All Forum Posts by: Dustin Beam

Verifying how they are metered is absolutely on my to-do list. 

I'm not exactly sure how many tenants are there, but it's not empty as I know that for an initial visit, I will only be able to view a couple units because of the occupants. Should this progress to the point of me making an offer, it will be contingent on viewing all units.

I will look up the purchase agreement. Thanks!

Thanks for the input @Joel Owens. You make valid points. See below for more info in relation to your post:

The area is low crime. In fact, it's a few blocks from a police station.

I'm still collecting information, but I believe the owner pays water and trash only. I do expect it will need some improvements on the units. How much? Not sure, but I'll see soon as I have a scheduled appointment to see the property. 

I didn't want to bog down my first post more than it was, but you're right to point out surrounding properties. It is probably my primary concern (outside of simply missing unaccounted expenses). This property is probably surrounded by approximately 30-35 other similar buildings. The good part is that they mostly rent for $550 (verified) and appear to be under good management.

Hey everybody,

I'm looking at a "deal" that could be my first, so there's a lot of caution on my end. I would assume most of you know the feeling. I'm a believer in the old saying "the devil is in the details" so I'm trying to analyze this property thoroughly and correctly. So, I'll try to be brief and will truly appreciate any feedback you're willing to give. 

Background: Two 4plex buildings.

Cost: Shooting for $250k

Rent: $500/unit/mo, $4000 total

Mortgage only: $890/mo

2% rule (of thumb): Fail

50% rule (of thumb): Pass for me

Detailed Analysis

Expenses:

Vacancy (10%):                          $400/mo

Taxes (verified):                          $216/mo

Insurance (est.):                          $175/mo

Mortgage:                                   $890/mo

Future management (10% est):  $400/mo

Cap X***:                                     $190/mo

Miscellaneous:                            $ X

Total:                                           $ 2271 + X

*** - I used this site for average life of components and Home depot for prices. Included components for CapX were water heaters, roof, furnaces, refrigerators, range/ovens, and window unit ACs.

OK, So if those estimates are accurate, the miscellaneous amount could total as much as $925/mo and I'd still make $800 month in cash flow. Although those rent numbers may indicate this in a shady area, it really isn't, yet those numbers resemble "bad area numbers" from the times I've analyzed them. So what do you think, am I missing anything critical?

Thanks,

Dustin

That's interesting you say that Mike, and I'm certainly not disagreeing with you as I'm inexperienced. Could you expand a little on that? I assume you mean it's easier to remove an unwanted tenant from a Missouri space than Kansas, but if not, I would like to know more.

Sure. I know there are some areas that might need to be avoided depending on a person's goals. I'd prefer to stay out of what some call "war zones". I don't want me, my potential future tenant, or anybody servicing the place to feel unsafe. Not worth it IMO.

Hi all, I'm one of the presumably many that have looked and looked but have yet to pull the trigger. I've spoken with a couple investors in the past and the feeling I got was that laws are more favorable towards landlords in Kansas than in Missouri. Would you agree?

I also found this article that says Wyandotte county is the #6 place to be a landlord. That link is strictly "by the numbers" though. Should I be looking in that area for the combination of ability to make profit and favorable landlord laws?

Ok, so long story short, I've been reading about residential income property for years. Still haven't pulled the trigger. I want/need the first property to work or I probably won't every try again, so that's where the hesitation comes from.

So why am I posting in this forum? :)

I'm posting here because I've considered moving into the city from the burbs (Kansas City) for quite some time. I've also considered getting into commercial real estate investing as well as residential, but have been a little intimidated. I mean, I've been a residential tenant, but never a tenant nor a landlord commercially. A property caught my eye (that I'm checking out tomorrow) that is multi-use. I would ideally live on the second floor and rent the bottom floor. Two birds with one stone, possibly.

Besides general nervousness of it all, I don't know the best way to really evaluate what I can expect for rent on the bottom floor. Nor how long it would "likely" take to get occupied. I also simply don't know what I don't know.

How would you advise I should start? Any advice or good links are welcome.

Thanks,

Dustin