All Forum Posts by: Laura C.

@Shellon Bristol Thank you for the warm welcome! I love the podcasts too! Best wishes to you as well!

@Dmitriy Fomichenko Thank you for the warm welcome and the tips! I appreciate the input and will take a look. 

@Andrew Johnson Thank you for taking a look! I also noticed it was on the market for quite a while! I had a feeling after going over it more than once that it wasn't a good deal, but I kept thinking I was missing some information. I tried to overestimate on some of the numbers, but as you pointed out, I may have underestimated on others. I will keep these things in mind as I analyze more deals! 

@Cameron Pendergraft Thank you for your input! It completely slipped my mind that the mortgage calculator included the insurance and taxes, so that putting them into the calculation again was increasing my overall expenses. I will watch out for that next time! Yes, there are 4 electric meters so I would have tenants pay their own electric bill, I'm guessing the electric that is recorded on Redfin is for property lights and laundry room equipment. 

@Sam M. Thank you for your input! The cap rate based on the numbers from Redfin would 5.8%. Of course, I'd be hoping to buy at less than the asking price, but that's the cap rate on that particular property. And based on a quick search in that area the typical cap rate is between 6 and 9%. 

Hi BP community!

My name is Laura and I am new to BP and to real estate investing. I was first introduced to BP from an article I was forwarded. Then I caught a YouTube that really sparked my interest. I went on to subscribe to the Podcast, which all led me here! 

I have been working in the field of education for a little over 10 years. First as an elementary teacher and then as an adjunct professor, and just recently took a break from teaching. I am now a stay-at-home-mom with a 2.5 year old girl and a 1.5 year old boy. We love to read books, take walks, cook, and play outside! 

My primary goal is to reduce my housing expenses by house-hacking. For our family that is our biggest expense each month. My second goal is to create an income stream that will surpass my previous employments, which will allow me to stay home with my kids and keep a flexible work schedule. Lastly, I have a freedom number in mind that will allow both my husband and I to "work" from home and "retire" early.

I'm happy to be here and excited to learn all I can!

Laura

I just completed a "Four square rental property analysis" for a fourplex in my area, and according to my calculations it has a negative cash flow. Am I missing something, or is this property just that "bad" of a deal? I have outlined my analysis below, and would appreciate any insight. Thanks!

Property: Fourplex in Southern California, Inland Empire area; each unit is a 2 bed/1bath, shared laundry, in a B class neighborhood; current rents are 1050-1200; market rent could be closer to 1300/1400.

Background: I used the information and numbers given on Redfin, to make these estimates; plus, I predict a sale price of $700,000 instead of the asking, $899,900. Based on the information they give about "net operating income," this property should cash flow around $2000/mo. (if you add in vacancy, repair, and CapEx, which they do not), but that is not what I'm seeing.

Analysis: (based on current rents)

Total Monthly income = 4700

Rental income = 4400

Laundry = 300

Total Monthly expenses = 6530

Taxes = 660

Insurance = 100

Water/Sewer = 150 

Trash = 70

Electric = 45

Gardner = 70

Vacancy = 215

Repairs = 400

CapEx = 400

Mortgage = 4420 

Cash Flow = -1830

Cash on Cash ROI = -63% (-21960/35000)

Total Investment = 35000

Down Payment (3.5% Owner Occupied) = 25000

Closing Costs = 5000

Rehab = 0

Misc. other = 5000

https://www.redfin.com/CA/Upland/880-N-Redding-Way...