All Forum Posts by: Ryan York

@Steve Smith Thanks for looking.

@Michael H. @Jeb Brilliant Take a look again if you don't mind!

That's still really small... I might just have to do this the long way. 

Purchase price: 70k

DP: 14k

Loan: 56k at 5% over 30 years

Two units rented out at 700 each. 

NOI: $6975

Annual Cash Flow: $3375

Return on Investment w/ Appreciation (assumed 1% for appreciation): 32.56%

CoC: 24.11%

CAP: 9.96%

The one thing I really struggle with is the upfront repairs. The duplex doesn't need much as far as deferred maintenance goes, however, it has a 30 year HVAC which I would plan on replacing.

When calculating up front repairs such as paint, the HVAC in this case, say new carpet, would you consider that as an upfront expense like your down payment? I would think this would affect your cash on cash return since I would have to come out of pocket right away to fix these things. 

Bottom portion... 

Sorry about that all. I assumed it would let you enlarge the image. I had to split up the spreadsheet to make it readable. Here is the top portion. Still might need those glasses :)

Hey BP, I'm currently trying to break into the REI world. Could anyone offer any tips or a second opinion about this property? Any advice/critiques of my analysis would be greatly appreciated.

@Jay Mitiguy

Hi Jay, in your spreadsheet, the second to last calculation says "return on investment - cash on cash."

Are you calculating a percentage there? Could you explain that calculation for me? I followed everything up until that. Thanks!

@Chadd Naugle, I thought that might've been the case. Thanks for replying! I have been doing quite a bit of reading, and I'm glad you brought that up about the valuation. I've seen some material mention that 2-4 unit homes are valued using comps and others say they're valued using the income. Are residential MFH always valued using comps? Is It both methods? 

And I agree fully with managing one 6 unit complex rather than 6 single family homes. That's more of a financial limitation, but as I read more, it seems like anything is possible when you find a good deal. So I'll definitely keep an open mind when it comes to bigger complexes.

I just finished reading @Brandon Turner's book about investing with no or low money down. It helped me to at least fathom how many possibilities there actually are when it comes to securing that first property. 

Thanks again for the feedback!

@Chadd Naugle I was hoping for some interesting insight after your questions :) I didn't realize I didn't mention you before.

Chad, forgot to address the other question. As for the designations, I don't know if I need one or not. I'm interested in them because they sound like they provide a lot of helpful information, but that's why I asked the question. You don't sound too interested in them. What's your take?

Thanks, Mark. I'll check that out. 

Chad, I chose those units because I feel they're better suited for my overall goal than single family homes. As for going larger, I'd love to someday, however, I currently don't have the capital for larger units and I also feel that learning to make this work would be a lot easier to do on a smaller MFH. After gaining some experience and having some success, I definitely plan to go larger.