All Forum Posts by: Lisa Vu
Lisa Vu has started 1 posts and replied 4 times.
Quote from @Leo R.:
Quote from @Lisa Vu:
Quote from @Leo Ray:
@Lisa Vu we need more info...
In addition to what @Nicholas L. asked, what are the total monthly expenses (incl. all debt service, PM fees, and maintenance/repairs)?
The current gross rent is $3,300/mo, correct? ...is that an appropriate market rate, or is it under/above market?
You said that it's in a "pretty good" neighborhood...is it an A, B, C, D, or F neighborhood? I'm pretty familiar with much of Pittsburgh, so I'm happy to provide my feedback on the specific neighborhood, if you tell us the neighborhood.
How much demand is there for this neighborhood, and how easy will it be to find new tenants when the current ones leave? Is it an area where everyone wants to live?
Existing tenants are often a red flag--landlords rarely sell high-performing, low effort properties that have great tenants in place (why would they?). What do you know about the tenants? (e.g.; what are their occupations, what is their income, how long have they been there, have they caused any property damage, how well do they seem to maintain their space, what proof does the seller have that the tenants have been paying on-time, etc.?)...regardless of what you do, you'll definitely want to look into what your options are for thoroughly vetting these tenants (a bad tenant can easily ruin a good property).
The more info you provide to the forums, the higher quality feedback you'll receive.
Good luck!
monthly payment for the HELOC including taxes and insurance $2,446 monthly.
add in a $300 buffer for repairs monthly and add in the 10% property management fee that comes to be $3,076 monthly.
I don’t have too much details about the tenants yet but this in South Park PA.
I see some potential pros and cons to the deal...
So, with 3300 gross rent, and 3076 in gross monthly expenses, you're cashflowing less than 300/mo (or less than 100 per unit), which in most scenarios, isn't great...it might be OK in an A+ area with A+ tenants, but in most other situations it would be fairly mediocre...
On the positive side, grossing 3300/mo rent on a 300k property is exceeding the 1% rule (you'll want to read up on that, if you haven't)--and this indicates that if you use the right financing strategy, the property might be a good deal...
On the negative side, what's your cash on cash return on this deal? (if you run the numbers, I think you'll find it's pretty low).
So, I think it's relevant to ask: is there a way to acquire the property without paying so much cash? (doing so would increase your CoC return). ...if you could buy the property with an owner occupant mortgage at 5% or even 3.5% down, move into one of the units and live there for a year, that would completely change the financial model, and it might become a good deal--is that feasible? And if so, what do your numbers look like with that approach?...
I think you either need to do that, or have a viable plan of dealing with that 300k HELOC debt so that you don't have so much money on the table, which will increase your return (and also so you don't have 300k of adjustable rate debt)...
...but, there might be some folks on the forums who are more familiar with purchasing properties entirely with HELOC who might be able to provide better feedback...
Pittsburgh is a great city--one of my favorites!
Good luck out there!
The rent looks like fair value in the area. There’s a newly built apartment complex less than half a mile away that rents their 1 bedrooms and 2 bedrooms a few hundred dollars above what this place is renting for.
I’ve thought about getting a mortgage and living in one of the units but it gets kinda tricky there. I currently live in a much bigger home (not by choice but due to circumstances during the pandemic) and the lenders have difficulties understanding why I’m choosing to downgrade into such a smaller home. They told me it would look fraudulent and more than likely be rejected by their underwriting department.
I’m really not sure if I’ve made my mind up about this property. I don’t want to be in debt and I’m almost completely debt free at my age. I would be throwing a lot of money at this property monthly to pay it down in 4-8 years if I end up purchasing it. End goal is to truly have passive income. Enough where I can retire at 40-45 if that’s possible.
Quote from @Leo R.:
@Lisa Vu we need more info...
In addition to what @Nicholas L. asked, what are the total monthly expenses (incl. all debt service, PM fees, and maintenance/repairs)?
The current gross rent is $3,300/mo, correct? ...is that an appropriate market rate, or is it under/above market?
You said that it's in a "pretty good" neighborhood...is it an A, B, C, D, or F neighborhood? I'm pretty familiar with much of Pittsburgh, so I'm happy to provide my feedback on the specific neighborhood, if you tell us the neighborhood.
How much demand is there for this neighborhood, and how easy will it be to find new tenants when the current ones leave? Is it an area where everyone wants to live?
Existing tenants are often a red flag--landlords rarely sell high-performing, low effort properties that have great tenants in place (why would they?). What do you know about the tenants? (e.g.; what are their occupations, what is their income, how long have they been there, have they caused any property damage, how well do they seem to maintain their space, what proof does the seller have that the tenants have been paying on-time, etc.?)...regardless of what you do, you'll definitely want to look into what your options are for thoroughly vetting these tenants (a bad tenant can easily ruin a good property).
The more info you provide to the forums, the higher quality feedback you'll receive.
Good luck!
monthly payment for the HELOC including taxes and insurance $2,446 monthly.
add in a $300 buffer for repairs monthly and add in the 10% property management fee that comes to be $3,076 monthly.
I don’t have too much details about the tenants yet but this in South Park PA.
Quote from @Nicholas L.:
not enough info. would need to know the following and maybe more...
-any big capex items coming up - roof, HVAC? what are you budgeting for monthly repairs?
-how will you finance it? how much will you put down?
-what utilities, if any, does the landlord have to pay?
-are all of the units occupied? If so, are all of the tenants current and do they pay on time?
After looking at the disclosure, I don’t see any large repairs as of current. This investment property was recently renovated the past year. I would say $300 monthly for repairs? I’m not sure…
Finance is all cash. I have a HELOC I'll be drawing down on around 7.25% interest I think. Utilities I'd have to pay is water and sewage. There is also maintenance for snow removal and lawn mowing.
Two units are occupied. The lease is up in March 2023 for one and the other unit is being leased April 2023-2024. I’m not sure if the tenants are current on payment.
Can someone let me know if this is a good deal?
Triplex located in the suburb of Pittsburgh. The neighborhood is pretty good. There’s plenty of restaurants and grocery stores around. Property is priced around $300,000 with the following units:
2 2 bd 1 bathroom $1,250 monthly
1 1bd 1bathroom $800 monthly
I would also be hiring a property management company that would take 10% of profit to take care of the property.