All Forum Posts by: Kollin Buchholz

Thank you @Taylor Howe!

Those are similar to the numbers I am getting as well. There are a few ways we will be maximizing the potential of this property (i.e. impact windows and kitchen upgrades). These items we feel will lower taxes and increase rents - giving us a bigger cash flow window in the range of 4-6%. 

That being said, is your example of 10% CoC a benchmark to shoot for, or is the 4-6% on a long term hold sustainable?

The only reason this is a sticking point for me is the location and price for the area is very good. Also, this really being a long term (40 year) investment for us, @Sergio Altomare had a good point that the right priced multi-family would not be in an area we would want to live. 

Ultimately, we are trying to avoid a boondoggle of an investment and ensure sustainable cash flow moving forward. 

Thanks again for all of your help and suggestions - this Bigger Pockets community has been spectacular!

Kollin

Thanks Bjorn, great suggestions!

Regarding Purchase Price and Rental Income - what numbers on this property make sense to you? 

I ask, since the current rent in the area collects $1,600/mo for a 2/2 like this one - so I use this as my absolute base. Similar sized units are renting at $1,900/mo right now and receiving a lot of interest from renters. Also, the purchase price may be negotiable further, after the inspection and appraisal. 

Just a few thoughts on this one. 

thanks again, 

Kollin

Thanks for the quick reply Anthony. The area is a higher market - Boca Raton, FL. Rental market has some fail safes with a large university nearby, beach within a mile and high end tourism. For appreciation, this particular property value has doubled in the last 6 years (mind you the previous purchase was in 2012, tail end of the housing crisis). 

Breakdown of numbers for you. I have used 3% each for Vacancy and Capex and 5% for Maintenance. Inspection today - so wont have real insurance numbers until later in the week, but the quote below is based off a similar property we received a quote on last week.

MO| Annual

Thanks again for your help - let me know any further info you need. 

Kollin 

Hi all, this is our first home purchase and it will be an investment in a duplex - long term hold for retirement income. We will live in one side for the first 2 years. I am looking at the numbers and cant tell if the ROI is good or not. Location is very good. We will do an 80/20 mortgage for 30 years fixed.

Purchase Price: $417,000.00

Min. Rental area Comps: $1,600.00/unit per month (some as high as 1800)

Repairs: none needed to rent one side (windows must be replaced soon)

As I see the numbers:

Income: $3,200 (potential)

Expenses: $1,163.00 (Vacancy, Taxes, Insurance, Maint etc.)

Mortgage: $1,690.00 (plus/minus $50 since we haven't locked rates yet)

We appreciate everyone's help and advice - we are very excited, but the ROI seems low for an investment, however, this will act as an entry into RE investment and allow us a place to live and collect some rental income simultaneously.

Inspection window closes next Sunday - so we are trying to get our ducks in a row before that to make an informed decision!

KB/CC