All Forum Posts by: Tony P.

I wouldn’t simply because there’s just not enough return in your money . Your expenses are way off you’ll be lucky to get 200 bucks a month in that and you’ll be a quarter million deep into that place . Not very exciting to say the least

This is how I'm feeling, I'm fixing the numbers to make it look better but I'm really not excited about the return. What I do love is the location

Aside from property management where do you see the expenses are way off? I'm learning as I go that's why I'm analyzing every deal I come across

Likely going to pass on this deal unless it's available for less. Thanks for the input

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Originally posted by @Carl Millsap:

@ Tony P. based on the information provided yes I'd buy the deal based on the current situation. I wouldn't buy based on speculation (talk) of another school or some other possible development.

The cashflow is good, and from what I can tell one unit rented should cover the mortgage. As for expenses are you in an area where water is paid for by the landlord?

What I didn't see factored into your expenses was a management fee. If you aren't going to self manage this changes your cashflow by $138 (6%) to $230 (10%) of rent collected.

When was the last time rents were increased? When was the HVAC, hot water heater replaced? Have you considered making a lower offer? Again, I wouldn't buy on speculation.

Hi Carl,

Yes I'm in an area where water & sewer is always paid by the property owner

I don't plan to manage the property myself. The current property manager only charges a fee to put a tenant in and for maintenance & repair calls. He says he rarely hears from the tenants and property has been decently maintained.

Rents have been brought up over the last few years to what the property manager feels is the max the market will take

I haven't looked inside the property but HVAC and water heater are top of my list for due diligence

Noted on speculation. My main interest in the property is how close it is to the university

I have considered making a lower offer, the property owner is from out of the Country and doesn't want the property anymore it's not currently listed on the market. At 210,000 it's above the appraised value of 190,000 but I believe still under market value

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*This link comes directly from our calculators, based on information input by the member who posted.

Up and down duplex, the property is located 5 minutes from a University, middle school, and there is talk about building another school 5 minutes away

No vacancies in the last 2 and a half years according to the property manager, new roof last year, the siding looks like it's in good shape.

Would you buy this as a first investment? Insurance and water bill are estimations. The property manager is interested in continuing to manage the property

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Originally posted by @Hai Loc:

Originally posted by @Tony P.:

Originally posted by @Tim Herman:

@Tony P. you need to find a motivated seller. I doubt that this would even cash flow at the 1% rule. You may have to look at a different area.

I'm going to keep looking I'm just analyzing anything I come across to practice and learn the market. I'm just wondering if I have the right approach to analyzing properties

Where is this property?

I would try and avoid being responsible for snow plow on a duplex. Incorporate it in the lease and the utilities..

That's not the proper cap. You dont include the mortgage as an expense.. only on a cash flow analysis..

But I can understand why you included

Hi Hai,

This property is in Moncton, NB

The market does seem to support an increase in rent. I've seen similar properties rent for 1400 in the area

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Originally posted by @Tim Herman:

@Tony P. you need to find a motivated seller. I doubt that this would even cash flow at the 1% rule. You may have to look at a different area.

I'm going to keep looking I'm just analyzing anything I come across to practice and learn the market. I'm just wondering if I have the right approach to analyzing properties

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Originally posted by @Tim Herman:

@Tony P. doesn't even come close to the 1% rule. monthly rental / .01= Purchase price. You have a weird loan of 25 years and 3.3%. Property taxes are high almost 3% of purchase price. I use repair and capex at 15% total. If this is a single family there should be no utility expense.

Hi Tim,

I know about the 1% rule but I haven't seen it apply in my area

The loan is from BMO website

Property taxes are high because in Canada we pay more property tax when the property is non owner occupied

The property is half a duplex. Tenant is paying heat/electricity owner is paying water

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View report

*This link comes directly from our calculators, based on information input by the member who posted.

I'm practicing analyzing deals. Help me analyze this deal, based on this calculation I can't see how I could make it cashflow

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Originally posted by @Aldo Balatti:

@Tony P. Might be a posting mistake... Is the duplex part of a commercial building with offices or stores below?

No, it's a standalone residential duplex. It seems like it was a mistake

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Originally posted by @Aldo Balatti:

@Tony P. In Canada, generally speaking 2 to 4 units is considered a residential multi-family investment rental property and can be financed with a conventional residential mortgage with 20% down payment with the posted residential market interest rates. For 5 units and above, it is considered commercial multi-family investment rental property and needs to be financed with a commercial mortgage with 30% - 35% down payment with the posted commercial and higher interest rates than the posted residential market interest rates.

.

Thank you Aldo, this is what my understanding was. Why would a duplex be listed as commercial?

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All Forum Posts by: Tony P.

Tony P. has started 14 posts and replied 39 times.

Post: What are you buying right now?

Post: [Calc Review] Help me analyze this deal

Post: [Calc Review] Help me analyze this deal

Post: [Calc Review] Help me analyze this deal

Post: [Calc Review] Help me analyze this deal

Post: [Calc Review] Help me analyze this deal

Post: [Calc Review] Help me analyze this deal

Post: [Calc Review] Help me analyze this deal

Post: Commercial vs Residential property financing

Post: Commercial vs Residential property financing