All Forum Posts by: Yuko Tanaka

@Hai T. and @Alex Flaugher, thanks for your boots-on-the-ground insight. I'm aiming to buy in the best location possible, and Class C/D isn't it! To @Andre Taylor and @Nic Stergion's point, getting local perspectives is critical. I'll plan on traveling to and speaking with investors from prospective investment areas as I get closer to buying.

My big takeaway: ROI and Cash Flow are just the tip of the deal analysis iceberg. Thanks to those who contributed--I've learned a lot from this thread :)

@Jeremie Osaghae-Nosa I won't be pursuing this property, but I would be doing long-distance if I was. Looks a bit too complicated for me to take on from a distance--a quality property manager likely wouldn't manage this property for me. 

Good tip on looking at school ranking as a proxy for tenant quality. Totally makes sense but hadn't occurred to me. 

Any tips on learning how to estimate rehab costs? I've been making wild guesses thus far. I plan on reading J. Scott's book on the topic, but I'd love to hear about how others learned this skill.

@Account Closed All good, I know there are no hard and fast answers. I've heard that renovation costs have gone up significantly over the past five years, but $30k+ for just the kitchen and bath--whew. Maybe it's time I pick up The Book on Estimating Rehab Costs instead of throwing random rehab numbers into my spreadsheet...

For sure on the higher crime areas point. I need to do my research there. Definitely don't want squatters and death threats! 

Is Neighborhood Scout your go-to resource for crime/market research, or are there others you've found useful? I'm about a month into learning about RE, and my deal analysis has mostly focused on ROI/cash flow metrics. Neighborhood/market analysis is the next challenge for me.

@Account Closed Ah, thanks--I hadn't heard of Neighborhood Scout. I'm not a subscriber (yet!) so can't see all the details, but how low a score / what kind of profile tells you that an area is a war zone? AreaVibes (free site) rates livability and doesn't deep-dive into crime, but crime rates are apparently 46% lower in this area than the St. Louis average. 

With my numbers readjusted (repair costs at $50k, rent at $500/unit, and Vacancy at 10%), I'm still getting $202.99 cash flow/door ($811.96 total) and 12.72% COC ROI. If you bump repair costs to $95k, the ROI would be 8.01% (which I think is not a home run but a base hit).

Does the location make it a no-go? 

I've found a property with numbers so good that I'm wondering if I've analyzed the deal incorrectly. I'm a newbie and would really appreciate the feedback! Here's the property: The St. Louis Fourplex (I'm not ready to pounce as I'm still learning the basics). 

Can anyone confirm whether my numbers are correct? What am I missing that would make this NOT a good deal? Note that I am not located in / familiar with St. Louis--maybe this is a terrible part of town? Thanks in advance!

Some key numbers extracted from the screenshot below: 
- Purchase Price: $95k
- Rental Income per unit (monthly): $670 (based on myrentrates analysis for 1BR 1BAs)
- Units: 4
- Repair Costs: $15k (total guess, but even with a $100k rehab/repair cost the ROI would be 12.9%).
- Cash Flow per door: $340.29
- Cash Flow, all units: $1361.16
- CoC ROI 39.26%