All Forum Posts by: Jason Golladay

I am in the Louisville area. Good luck in your search for a graduate school. You will find many great schools here.

Thank you very much.

I understand that. Thanks.

Do you put each property in a separate LLC?

What about holding rentals in an LLC? Will an umbrella policy adequately cover me if not?

Also what is the opinion on using cash flow to pay off the property early. Should I use the cash flow for more investments?

There seems to be alot of varying opinions.

Thanks.

The seller was widowed several years ago and no longer wants to be a landlord by herself. I have discussed the "numbers" of the duplex with her and there is a possibility of a price reduction. The sellers does not owe anything on the properties and she did not understand that with my debt service the duplex is not a deal for me....she just knows that paid for it makes her money.

Thanks again.

Good perspective....dont believe I would.

Thank you for your replies. Here is some more information.

The duplex property has a low return rate. At current rents the property would have a 5.8% Cap. Rate w/ 8% vacancy and moderate repair/maintenance expenses. It would take 30% down ($37,500) for the property to break even w/ the above stated variables and a 30 year loan.
A little market research on my part shows the rents to be on par with other units in the surrounding units.

The four plex on the other hand w/ 10% down ($15,000) has a Cap. Rate of 9.55% and cash flows $4,600 per year with a 30 year loan. This is also with 8% vacancy and moderate repair/maintenance expenses.

Once again thanks for all replies.

I am new to the forum and would appreciate some outside insight.

My wife and I are in the process of buying a 4 plex apartment building. We have been landlords before (although single family) and my question is basically a financial one. The four plex is an easy decision for us...5 minutes from our home and well maintained with 2 long term tenants. Even considering vacancy rates and maintenance/repairs the property should cash flow enough to pay off itself in about 12 to 14 years. We do not need the cash flow for income now. That is putting 10% down.

So here is the caveat, behind the four plex is a duplex offered by the same seller. Maintaining both next to each other would be ideal. However the duplex has a negative cash flow. Both properties together would still cash flow positively but not enough to facilitate much of an early pay off. The duplex is also well maintained and has even longer term tenants.

Of course the question is do you buy negative cash flow property? I like the idea of the property paying itself off early. I would rather not put any other income towards the early pay off of the real estate.

I have done some market research in the surrounding area and it seems the rents are on par with other properties.

Will a duplex appreciate more than a 4 plex?

I plan to hold my properties long term and would like them to be paid off when I retire in approximately 13 or so years. I will be managing the properties and can handle all but major mechanical repairs.

Thank you for your opinions and advice.

I am new to the forum and would appreciate some outside insight.

My wife and I are in the process of buying a 4 plex apartment building. We have been landlords before (although single family) and my question is basically a financial one. The four plex is an easy decision for us...5 minutes from our home and well maintained with 2 long term tenants. Even considering vacancy rates and maintenance/repairs the property should cash flow enough to pay off itself in about 12 to 14 years. We do not need the cash flow for income now. That is putting 10% down.

So here is the caveat, behind the four plex is a duplex offered by the same seller. Maintaining both next to each other would be ideal. However the duplex has a negative cash flow. Both properties together would still cash flow positively but not enough to facilitate much of an early pay off. The duplex is also well maintained and has even longer term tenants.

Of course the question is do you buy negative cash flow property? I like the idea of the property paying itself off early. I would rather not put any other income towards the early pay off of the real estate.

I have done some market research in the surrounding area and it seems the rents are on par with other properties.

Will a duplex appreciate more than a 4 plex?

I plan to hold my properties long term and would like them to be paid off when I retire in approximately 13 or so years. I will be managing the properties and can handle all but major mechanical repairs.

Thank you for your opinions and advice.

Sorry should have posted under deal analysis!