All Forum Posts by: Erania Brackett

@George Bittar I’ve been here. It’s tough. I invested in a duplex in ATL just before the crash and couldn’t sell it. Invested more to make it rent ready and had crappy tenants. I consulted with HUD and cut bait and offered it as a short sale. I know better now and am about to buy another duplex to house hack. Keep moving. The benefits are in the learning and the mistakes. Good luck!

Thanks, all.  I've let this one go.  I'm now looking at a fixer upper (to put it mildly.  I am looking at a property that is a short sale.  I may need to put significant $$ into it to bring it to a level that I can rent it and have positive cash flow.

I'll share my analysis on this one soon.  I have a contractor coming today.  I hope to find out if this property can be converted from a 2 plex to a 4 plex.  If I can get it for 50-70K and invest 100 - 150K, with a 4 unit, this one could be worth it.  Lots to do.

Thanks for all of the super helpful advice.

Jason, I agree. Many of those tenants have been there for at least 4 years. I walked the units and they will need some work. My plans are to find a property that I can hold onto to find retirement, either by selling it later or using rental income as retirement supplementation. Yes, for a short time, I'd like to landlord provided the cash flow is good and I have good equity. Does this help?

Jason, thank you. I will have to build in a higher vacancy rates for units that have existing tenants.

@StevenL. Thank you. Your analysis is yielding very different results. I agree my numbers are off. I'll double check. Thanks for running these. I'll update the calculator and post. I did come across a 6/4 duplex that is a short sale at 109. I'm thinking of converting to 4 units and maxing the property potential. It needs a ton of work however and an overhaul to create the 4 units.

Adding to my questions as I am learning here.  What makes this a bad deal?  Here are my assumptions:

The lack of significant equity

Low cash on cash return

I am not forcing this property.  I thought I'd look at it for these reasons:

- Tenants occupy all units (one moving in Dec, then I'd occupy)

- Small cash flow at current investment estimated.  

- Carriage house can become air B&B.

- Tents are below market rates

After Improvements and increasing the rents, the property yields a 20% cash flow.  But the equity I estimate won't be much.  Maybe 40K.

As I type this I suppose I am betting on a future based on cash on cash return and still with little equity at the current price.

I'll likely walk from this deal.  The owner paid $300K and I don't expect he'll give it to me for 100-200K.

More thoughts welcome!

@Jasonchen thank you!! I reworked the #'s by lowering the price down to 310 and putting 40K in it. I also raised rents. At that rate it cash flows 10%. I agree it is priced too high. The owner isn't distressed and would be willing to keep it. I'll offer much less and see what he says. Otherwise, I'll keep looking. How much cash on cash return do you look for in a multi family?

Thank you for your input Anthony. It is very helpful. I am pushing to get the investment and the purchase price down to at least make 10% cash on cash return.

Hello, all.  I am looking at my first deal and it is a multi family opportunity.  I'd like your feedback on this deal.  I am new to investing and have limited knowledge of construction and rehabs.

A key question I have is how much cash flow is ideal for a multi family?  What cash on cash return makes sense.

I would like to house hack and start with a property that doesn't require a full overhaul.  I am considering a multi-family.  I assume I buy it at a 10% discount and invest $40K into the property to increase rents by $100 on 3 of the units and by $300 on the largest 2/2.  The home has a 1/1 carriage house that I'd like to rent out on Air B&B to make more money on it.  You thoughts are welcome. 

Please send Mobile, Alabama. 36603, 36605, 36604, 36606. 

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