All Forum Posts by: Justin D.

Thank you Chris.

From the assessor:
Total Assessed Value $139,000
Land Assessed Value $2,800

The house takes up the whole lot, there is parking for 6 in front of the house. That would only require snow removal in the winter.

I made a mistake on utilities at 13,500. They are just under $7500/year and slightly falling per owner. I added 200 to utilities and 200 to taxes. Insurance is quoted from the seller, the asbestos is only on the heat ducts past the basement ceiling and up. BX wiring is 70s or so, armored for 2-3floor runs, newer panel with breaks in the basement.

@ 25% for vacancy

TOTAL OPERATING EXPENSES $18,500
NET OPERATING INCOME $13,000
Less: Annual Debt Service $(9,512)
CASH FLOW BEFORE TAXES $3,488
Add Back: Principal Payments $2,267
- Depreciation $(5,727)
TAXABLE NET INCOME (LOSS) $28

Thank you Will.

I have a new excel using 5% vacancy and 5% repair... I've talk to the owner and 160k was his lowest, I talked him into $157.5k, here are the figures:

Cost Basis $157,500
Less Mortgages $126,000
Equals Initial Investment $31,500

Ratio Information
Loan to Value 80%
Cashflow / Initial Investment 39%
Cashflow / Assets 8%
CAP Rate 14%

126k loan $793/mo @ 6% @ 25yr

POTENTIAL RENTAL INCOME $42,000
Less: Vacancy $(2,100)

GROSS OPERATING INCOME $39,900

OPERATING EXPENSES
Real Estate Taxes $6,000
Property Insurance $1,500
Repairs/maint $2,100
Utilities $7,500
Advertising $100
Miscellaneous $500
Snow Removal $500
Accounting and Legal $300



TOTAL OPERATING EXPENSES $18,500
NET OPERATING INCOME $21,400
Less: Annual Debt Service $(9,512)
CASH FLOW BEFORE TAXES $11,888
Add Back: Principal Payments $2,267
- Depreciation $(6,300)
TAXABLE NET INCOME (LOSS) $7,855

Property is all brick, new roof, remodeled kitchen and bathrooms, copper pipes, newer electrical, new furnace, no landscaping. Maint should be low.

How do the above figures look?

50% rule

3500 rent
1750 expenses
1750 NOI
desired cash flow $600 (100/unit)
max payment $1150
rate 5.75%
term 25 years
max loan $228,000

2% rule
$157,000 is $3150, actual rental income is $3500

Thank you brendan,

100% occupied at those rents right now.

Anyone?

How does this look for the 6 unit if purchased at $150k

Financing Information
Purchase Price $150,000.00
Cash Invested $30,000.00
Loan #1 Amount $120,000.00
Interest Rate 6.00%
Monthly PI $773.16
Term in Months 300

Property & Depreciation Information
Land Value $0.00
Personal Property $0.00
Building Value $160,000.00
Personal property depreciation $0.00 at 20.00% depreciation
Building depreciation $5,824.00 at 3.64% depreciation
Total Depreciation $5,824.00

Gross Operating Income
Annual Rent $42,000.00
Less Vacancy $2,100.00
Gross Operating Income $39,900.00
Annual Expenses
Real Estate Taxes $5,700.00
Utilities $13,500.00
Insurance $1500.00
Maintenance/Repairs $0.00
Advertising $0.00
Admin/Legal $0.00
Supplies $0.00
Miscellaneous $0.00
Total operating expense $20,700.00
Operating expense ratio 51.88%
Tax and Appreciation Rates
Tax bracket 35.00%
Appreciation rate 5.00%

Cash Before Taxes
Gross Operating Income $39,900.00
Operating expense - $20,700.00
Net Operating Income = $19,200.00
Annual Debt Service - $9,277.92
Cash Flow Before Tax = $9,922.08
Cash After Taxes
Net Operating Income $19,200.00
Total Interest - $7,141.88
Total Depreciation - $5,824.00
Taxable Income = $6,234.12
Tax Paid or Saved $2,181.94
Cash flow after tax $7,740.14
Rates of return
Total appreciation $7,500.00
Return on Investment with appreciation 72.47%
Return on Investment without appreciation 47.47%
Cap Rate 12.80%
Cash on Cash 33.07%

Just got back from inspection, everything is solid, inspector sees roof work in 10yr, minor plumbing, new water heater soon, nothing major.

Need some advice.

The duplex, asking 67k, I know I can get for 60k.

The 6 unit asking 172k, I know they'd do 165k, but I'm going to try for 155-160k.

Hello,

I'm new to REI, a month ago I wouldn't even know what REI stood for... I am looking at two properties, in the same area.

Duplex:
Listed 67k
2 BR UPR 425, includes washer, dryer, stove and ref
3 BR LWR 675 includes stove, dish, ref
Rent $1100

New roof '10, boiler and baseboard heaters '09. All electric rewired in base, (ties into old going up) breakers installed in 2nd unit, wireless smoke det, water tank '10, plumbing '08 (copper with galv) carpet '08, most major work done, quite a few of little things need work, owner is doing that now.

Taxes $2500
Ins ?
water ?
Tenants pay electric and gas.
loan would be about $250/mo 45k @ 5.75, 30yr, 3k closing

6 unit:
4 2 BR $650/ea
2 studio $450/ea

2010 figures
3500 rents
5768 taxes
1500 ins
2244 heat
3600 electric
1500 water
1218 total monthly

All brick 3 story, no landscaping, new furnance and half roof done in '05, all kitchen and bathroom remodeled, new windows, flooring, entry doors, carpets, coin laundry, stoves, refs, and smokes done in '06
appriased 165k in '07, asking price 172k rents include utils, looks to be turn key, fully rented, no work needed, inspection tomorrow 3/19/11, i know it has older BX wiring and asbestos wrap around the heat vents between walls

I can get a comm loan. for 6% @ 25yr, with .25 $921/mo

Thanks for your time,

Justin