All Forum Posts by: Vincent Phan
Vincent Phan has started 5 posts and replied 24 times.
Post: Need input on first rental property
- Posts 24
- Votes 7
Originally posted by @Steven Foster Wilson:
@Vincent Phan I am currently only investing where I am from and currently live, Columbus OH. The home prices here are pretty good, they seem to be rising with the rest of the housing market, but from time to time you can find a gem for a nice price.
For example last month I closed on a 3 unit with an extra vacant lot for $160,000. Far exceeds the 1% rule and is in an appreciating neighborhood.
wow. i wish i can get that here. what is your vacancy rate?
Post: Need input on first rental property
- Posts 24
- Votes 7
Originally posted by @Jaysen Medhurst:
@Vincent Phan, is the basement a legal unit? If not, that won't be an option to get owner occupancy.
As far as your numbers:
- Gas is going to be way more then $100/month for 2 units in Chicago. Probably 2-3X more. Ask the owner for 1-2 years of expenses. Call the gas company and see if they'll give you numbers.
- You're forgetting Vacancy (8%), Repairs (7.5%), CapEx (7.5%), and Management (10%).
- Is there a separate electric meter for the garage? Who pays for the lights in there?
- PMI won't be relevant in this case, I don't think.
- You're still missing water/sewer. Probably $80/month? Call the water department and get last year's numbers.
- Snow removal? Any lawn care?
My rough numbers show you ($135)/month. That's negative.
Jaysen, these are all valid points. I will have to do my homework. I know there are 3 gas and electric meter. Not sure about the water though. The basement is not legal unit since the height is not high enough. I think even if this works, the numbers will be super tight. As a first time investor, we just love the fact that it is turnkey.
Post: Need input on first rental property
- Posts 24
- Votes 7
Originally posted by @Steven Foster Wilson:
@Vincent Phan ahh chicago. And here I was thinking you were in Dayton, Indianapolis, or some other "midwest city". Chicago is a market that I am unfamiliar with, though Im sure prices are SUPER expensive.
Steven, do you invest outside your state? I dont mind doing that if I can find decent returns.
Post: Need input on first rental property
- Posts 24
- Votes 7
Originally posted by @Steven Foster Wilson:
@Vincent Phan I also invest in the midwest, and I have a general rule of thumb, as do most investors here. If your monthly income is not at least 1% of the purchase price, theirs a better deal out there. Sounds like your total monthly rent would be $2,800/300k = .9%
Steven,
Im here in Chicago. It's really hard to find places that is 1% rule here. I came across maybe 1-2 but they are in the south side and not exactly up and coming areas.
Post: Need input on first rental property
- Posts 24
- Votes 7
Originally posted by @Jaysen Medhurst:
@Vincent Phan, what's your plan, house-hack? If not, you won't be able to get 5% down. That's only for owner-occupied properties.
With that in mind, I'm assuming this is an investment and you'll be putting down 20%. Before we can help we need the rest of your expenses. Gas, water/sewer, insurance, lawn care/snow removal? Get us all of those numbers and we can see what's what.
It's really going to come down to how much that gas bill averages each month.
Hi Jaysen,
Here's my calculation. let me know what you think.
PS: we are meeting with another banker tomorrow to talk about financing option. The current lender we are working with can only do 20-25% down as an investment property. We are thinking about owner occupying the basement so we can take advantage of the 5% down.
| purchase price =300k rate = 4.2% term = 30y | |
| Potential Rent/month | |
| unit1 | $1,300 |
| unit2 | $1,300 |
| garage | $150 |
| total | $2,750 |
| Op Expense/month | |
| gas | $100 |
| mis exp | $42 |
| Principal/int | $1,394 |
| Property Tax | $308 |
| Homeowner in | $123 |
| morgage in | $238 |
| total | $2,063 |
| Net op/year | |
| income | $33,000 |
| op exp+loan | -$25,956 |
| total | $7,044 |
| net op + mortgage | $23,772 |
| purchase price | $300,000 |
| cap rate | 7.92% |
Post: Need input on first rental property
- Posts 24
- Votes 7
Hi all,
I’m looking for my first rental property. I found something that I might pull a trigger on (offering). Just want to get some opinions.
- 300k purchase price
- 5% or 20% down depending what we can get. On a 4.25% int rate 30 year loan.
- 2 flat. Gut rebabbed with 2 units
- midwest
- owner paid water, hot water and furnace. So there’s only one hot water tank and furnace for both units.
- potential $1300-1400/unit plus maybe $150/m for both garage space.
- $3700/ year tax
I’m getting between 7.5-8.5% cap rate depending on the cost of gas and mortgage insurance and if we do 5% down or 20% down. Between 12%-38% as cocroi
What do you guys think? I don’t know anyone i know that can give me an input on this besides my real estate agent so your input is greatly appreciated.
Post: Chicago area investor
- Posts 24
- Votes 7
thanks John! I appreciate the info. I will look for local meetups!
Originally posted by @John Warren:
@Vincent Phan welcome to the forums! There are tons of investors here in Chicago. I would recommend that you start attending local meetups. When I was a newer investor I joined a local land lord group in Berwyn near where I live. That group has mentored me over the years and provided referrals for some amazing contractors that have become integral members of my "team" as I renovate and operate apartments. I think networking groups (especially free ones) are one of the best places to start out.
Post: Chicago area investor
- Posts 24
- Votes 7
Anyone from Chicago that is looking to invest in rental properties or that is currently an investor. Looking to make some connections.
Post: Hello from Chicago ! newbie with some exposure
- Posts 24
- Votes 7
Originally posted by @Joseph Konney:
There are a bunch of great calculators under the tools menu on this website. Check them out!
Thank you!
Post: Hello from Chicago ! newbie with some exposure
- Posts 24
- Votes 7
Originally posted by @Joseph Konney:
Prudently investing in a multifamily should save you money. Use the savings to accumulate another down payment quicker. Buy your next multifamily and so forth.
Use the BP calculator on each property and see where your equity and cash could be in five years with each scenario.
Hi Joseph, thank you. Can you share this bp calculator?