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What are the your rules on investment property owning?
Posted on 1/5/15 at 10:12 pm
Posted on 1/5/15 at 10:12 pm
especially for multi family units. Looking at buying a multi family unit and I'm obviously trying to make sure it's a good deal before purchasing. I'm going to throw out some numbers and I'd like some feedback.
I'm going to use round numbers:
Purchase Price: 160K for six units. The units rent out from $400-500 each. Four units are currently occupied and two are being used as "showrooms"
Dwelling insurance is about $1400/yr
Property taxes @ $2700/yr
owner covers sewage/trash at @ $2000/yr.
These units are all relatively new and in good shape. Without knowing much more, what would you say? Suggestions or other things to look for? I'm obviously new to this so any and all information is appreciated.
I'm going to use round numbers:
Purchase Price: 160K for six units. The units rent out from $400-500 each. Four units are currently occupied and two are being used as "showrooms"
Dwelling insurance is about $1400/yr
Property taxes @ $2700/yr
owner covers sewage/trash at @ $2000/yr.
These units are all relatively new and in good shape. Without knowing much more, what would you say? Suggestions or other things to look for? I'm obviously new to this so any and all information is appreciated.
5
Posted on 1/5/15 at 10:21 pm to Sofa King Crimson
Where at? Sounds like a slum lord unit.
Posted on 1/5/15 at 10:24 pm to eng08
its on the coast in MS. They're all 1br/1bath.
Posted on 1/5/15 at 10:24 pm to Sofa King Crimson
Putting anything down? Sounds like a potential to make some $ if you can put down and keep them rented.
Posted on 1/6/15 at 8:10 am to Sofa King Crimson
You forgot to figure in $300/month for either a plumber, electrician, or new appliance in one of the units.
Eta: That's just a round number, but with 6 units something will need fixing nearly monthly.
Eta: That's just a round number, but with 6 units something will need fixing nearly monthly.
This post was edited on 1/6/15 at 8:11 am
Posted on 1/6/15 at 9:06 am to Sofa King Crimson
1400/yr seems very cheap for dwelling coverage on the coast. What about flood coverage?
4 units rented per month x 450 per unit x 12 months = $21,600 a year. There is always some turnover but if you can find a way to get at least 5 rented, I think that will help.
At those numbers, I think the two biggest things you need to look at are the monthly note, and how much of the work you can do yourself. If you can do most of the repairs yourself, this will help. If you always need to call someone, that can eat into your profits with the quickness.
4 units rented per month x 450 per unit x 12 months = $21,600 a year. There is always some turnover but if you can find a way to get at least 5 rented, I think that will help.
At those numbers, I think the two biggest things you need to look at are the monthly note, and how much of the work you can do yourself. If you can do most of the repairs yourself, this will help. If you always need to call someone, that can eat into your profits with the quickness.
Posted on 1/6/15 at 10:27 am to LSUFanHouston
Just had to call the AC people for mine today becasue the heater went out. Still seems with the OPs numbers he could make some $ off it if they stay rented. OP if you go through with it take every bit of profit and save enough cash to have 6 months mortg and cash for repairs before you start thinking of doing anything else. I plan to get some more rentals...wouldn't mind looking into multi fam....mine are single.
Posted on 1/6/15 at 11:21 am to Sofa King Crimson
I suggest not offering appliances. Make them buy the stove/ fridge and possibly do the coin operated shared laundry services.
Posted on 1/6/15 at 2:01 pm to eng08
I can see making them buy the fridge... but the stove? I thought a stove was pretty standard.
I definitely would not provide washer and dryer... do the units even have hookups? If you do coin operated you need a shared space to put them.
I definitely would not provide washer and dryer... do the units even have hookups? If you do coin operated you need a shared space to put them.
Posted on 1/6/15 at 3:04 pm to LSUFanHouston
Yeah, I know. I just had this similar conversation with a friend.
My current rentals have all appliances and I have good tennants in graduate school or just out of college.
I have a friend who has more slum lord units in New Orleans. It's 400-500 a month each and if the Tennant gets a speeding ticket guess who they are not paying? They would rather pay the ticket and stay out of jail than pay rent.
My friend also offers no appliances because his turn over is so high with like 20 units.
He also does not fix toilets, he just replaces them bc it will cost the same with the plumber showing up.
My current rentals have all appliances and I have good tennants in graduate school or just out of college.
I have a friend who has more slum lord units in New Orleans. It's 400-500 a month each and if the Tennant gets a speeding ticket guess who they are not paying? They would rather pay the ticket and stay out of jail than pay rent.
My friend also offers no appliances because his turn over is so high with like 20 units.
He also does not fix toilets, he just replaces them bc it will cost the same with the plumber showing up.
Posted on 1/6/15 at 8:13 pm to eng08
Numbers look solid to me. Post it in the marketplace on bigger pockets and you will get excellent responses.
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