Alright Experts,
Please let me know what you think,
3 Family
4br, 1.5 bath each
Fully Rented $1250/mo Leases til September
$4k taxes
$1500 insurance
$600 water
$210K mortgage
Alright… let’s see if I got this right…
Rents do not cover the mortgage…
210K @ 7%/30 years → mortgage = 1,397 (lower than $1,250 rents).
However if the $1,250 rent is per unit, than total rents is $3,600/month.
In this case, considering that 50% goes to operating expenses you will have $1,800 to cover your mortgage and cash flow.
At 7%/30 years mortgage you would get $402 positive cash flow per month (more than $100 per unit) → probably a good deal.
At 8%/30 years mortgage you would get $259 positive cash flow per month (less than $100 per unit) → less than what you should aim for, but maybe still a deal.
I hope I got this right… I am practicing… :O)
Good luck!
Sorry J1dias,
You are correct that the rents are 1250 pre month.
MRice
Made a mistake on that post I meant 1250/mo per unit.
actually is $3750 / month not 3600
so 1875 for mortgage and cash flow.
if your getting 6% mortgage your in very good shape. 210k@6% about 1260/month 615/month cashflow. 205/ unit :smile
even at 7% your still at almost $500 cashflow roughly $160/unit
seems like a decent deal.
Here is how I see the numbers:
Gross rents: $3,750 per month
Operating Expenses: $1,875
NOI: $1,875
Mortgage ($210K, 30yr, 7%): $1,400
Cash flow: $475 or $158 per unit per month
GOOD DEAL!
Mike
How come you guys always use a 30 year AM???
My bank won’t go past 15 years, of course these are commercial mortgages they hold in house. All with 5 year balloons at 7%
My properties won’t pass secondary guidelines, I tried once with countrywide (HUGE MISTAKE!!) they sent out this young girl appraiser, who probably only does nice new homes in the burbs, to do an inner city ghetto property of mine. She freaked out! Called me, wouldn’t get out of the car until I was there, didn’t stay long either. The house needed repairs, but nothing out of the ordinary, all I got from country wide after that was a “no thanks”
Total BS I won’t deal with again. My bank uses tax value instead of a bogus appraisal anyways. I think they are the biggest ripoff on this side of the universe. I shoulda been one I guess.
“actually is $3750 / month not 3600”
OOOPs… my mistake… good thing that I did it here, not in real life… :O)
I will try to get it right the next time… :O)
I just want to thank you all I locked this one down for 195K and I am feeling good. It has taken a lot of hard work to get here but it is worth it. Thank you everyone for your cooperation and advice.
Congratulations! If you don’t mind me asking, what kind of financing did you secure?