All Forum Posts by: Joe P.

Per door?! Where can I find those deals?

 Yep, looks like it should be $12,600?

Hi @Chris P. I am not flipping or rehabbing the property so I wouldn't know the ARV; I suspect max is 300,000 given the area. The property is fully rented so I am buying for cash flow, not for appreciation. In my mind I think cash flow is king, and appreciation or future repair value is icing. The goal is to get it, start gaining cash flow and any appreciation right back into the business for the next property, the next property, etc.

Hi @John Leavelle as I mentioned above I'm not flipping or rehabbing. The ask is 289,900. The current owner paid 327,000 for the property in 2008 at the height of the market, it would seem. I think 250,000 is fair given the condition and time on market. Comps are tough because its a 4-unit property, but I see a property sold for 302,000 nearby with about $300 less cash flow per month. A 3-unit sold for 137,000 but the cash flow isn't comparable. A 5-unit is currently for sale for 329,000 and only makes about $200 more cash flow per month. Comps are odd and I bet if you ran them in 2008 for this property it would have seemed like a good deal then, too. I'm looking at this purely from a cash flow perspective, I hit 7.5%, maybe better with my (what I think are conservative) numbers. But the property would certainly need work in the next few years as the condition is C+. Rent is about market, largest/most cash flowing property is section 8.

@Thomas S. what would you be looking for? I thought 8-12% is about the sweet spot.

Hi all -- looking at a 4-unit property in Glenolden PA. I think its priced too high, so my numbers below work at the price I wish to offer. Let me know your thoughts:

Purchase Price:  $250,000

25% Down Payment

Units - Four (4) total:  4 bdrm, 2 bdrm, 1 bdrm, 1 bdrm

TOTAL MONTHLY INCOME $3500

Mortgage Payment: $1021 month

Insurance:  $130 per month

Taxes:  $408 per month

Heating/Utilities:  $218 per month, water and heat. Higher in the winter but averaging this cost out.

Property Management (10%):  $350 per month

CAPEX (10%): $350 per month

Vacancy (8%):  $280 per month

Maintenance (8%): $280 per month

TOTAL EXPENDITURES:  $3,039 per month

Final Numbers:
Cash Flow:  $461 per month

COCR: 7.41%

Cap Rate:  16.80

Curious to know your thoughts -- isn't the best deal in the world, but I haven't seen much better out there. Neighborhood is C+/B-.

Yep, first thing I saw was it didn't hit the 1% rule (monthly rent should be 1% of the purchase price). Now the 1% rule isn't everything, but I can tell you that I just sold my old property for around 200,000 and the rent was 1400. I broke even and that was by putting off some CAPEX, which is the new owner's problem.

It's good that you're handy and can do work yourself, but this thing isn't going to do much unless it appreciates at a high rate or nets you a great return on your taxes -- but cash is king in these deals. If I am paying 200k, I want 2000 in rent, more if possible.

As @Andrew Johnson indicated -- and he is a smart guy -- you're paying yourself to PM the property and nothing else, or investing for appreciation. If this is an area that will shoot up in appreciation at a high rate, then go for it. But if not...I would advise caution. This property will never make you any money.

Yep, first thing I saw was it didn't hit the 1% rule (monthly rent should be 1% of the purchase price). Now the 1% rule isn't everything, but I can tell you that I just sold my old property for around 200,000 and the rent was 1400. I broke even and that was by putting off some CAPEX, which is the new owner's problem.

It's good that you're handy and can do work yourself, but this thing isn't going to do much unless it appreciates at a high rate or nets you a great return on your taxes -- but cash is king in these deals. If I am paying 200k, I want 2000 in rent, more if possible.

As @Andrew Johnson indicated -- and he is a smart guy -- you're paying yourself to PM the property and nothing else, or investing for appreciation. If this is an area that will shoot up in appreciation at a high rate, then go for it. But if not...I would advise caution. This property will never make you any money.

Hmmph - I sort of go with @Alexander Felice on this one; what are you bringing to the table if you cannot invest money or experience in a deal?

You'll need money. Repairs, bills, maintenance, CAPEX, marketing, etc. - they all require money. Sure, you could find some hard money lender, theoretically, but you have no track record.

Look into achievable steps that align with your (realistic) goals. I want to be a pro soccer player, but I'm in my 30s and couldn't even hold a candle to semi-pro players. So you need to be realistic, achieve, and work your way up.

Could you get a FHA loan @ 3.5% and house hack? Absolutely -- I think that's possible. Start there, and see if you can have someone else pay your living expenses while you save money for the next step.

@Andrew Johnson thanks for that info! Would other amenities like washer/dryer in-unit be important for college students? I think of myself and I always did my own laundry, but I'm wondering if other students go home for the weekend or don't really care about that type of thing.

Rent by the room, approximately 4-5 blocks away from campus. I went to Temple but I didn't live on campus, so its hard for me to define if that's too far or not.

The property is a duplex, one is a 4-bedroom and another is a 6-bedroom. I don't think I would look to do per room rental, I'm thinking its better to advertise as a 4 and 6 and let groups of students come to me?

Thinking of buying a property near Temple University. Just curious if anyone is involved in student housing and how that may be better/worse/different than renting to standard tenants?

I think the primary thing is require co-signing from parents. But do the properties do worse with perhaps rotating student tenants, they're young, etc...so would my CAPEX need to be significantly higher than normal?

Just looking to see what people think of that area of properties/tenants and anything I should be aware of.