First time investor, what do you think of this property?

List price $264,900.
Haven’t tried to bargain at all yet, not sure how flexible he is on price.
No money down.
At 6% the calc I used says $1588 for the monthly payment.
3/2/1 bedrooms
2,777 sq/ft
Next town over from Hartford, CT (capitol city, a lot of high paying jobs there and this town being quiet but close to the city gets a lot of families that need to live close to work)
Owner (he’s also the agent) says its fully occupied, tenants are all long term. Rents are 2br $867 month to month, 3br $850 leased, $650 month to month.
Taxes are $3100/yr.
Other info from listing on site: New Roof, Updated 3 Family,Long Term Tenants, 21K Profit Annually, Fireplaces. Agent/Owner

Even with insurance, maint., and other expenses it seems like a good deal to me. Oh, also has a 1 car garage, might be able to rent that out for a little bit of extra a month to someone that needs storage or space for a sports car.

Nevermind, noticed I’d be paying heat and hot water. With heating costs where they are I’d be running in the red all winter long. F THAT! ::slight_smile:

I think I know this property of which you speak. At that price it is not a good low or no money down value for an investor. Unfortunately most of the houses in this city are priced too high to cash flow well for this type of investing.

Even if you took the Heat and HW out you would still be in serious trouble. I did a Q&D annual cash flow for you based on my experience in this city.

Property Address Cedar St

Asking 264900
Deal-Price Paid 264900

Gross Income
Monthly Rent 2392
Annualized 28704.00
Other Income 960.00 Garage
Total Gross 29664.00
Less Vacancy 1483.20
Effective Gross Income 28180.80

Taxes 3100.00
Insurance 1500.00
Water/Sewer 720.00
Garbage 0.00
Electricity 360.00
Mortagate Ins 3443.70
Advertising 240.00
Supplies 0.00
Maintenance 1500.00
Snow Removal 1200.00
Pest Control
Total Expenses 12063.70

NOI 16117.10
CAP 6%

Debt Service
1st Mortgage 19068
2 nd Mortgage 0
Total Debt Service 19068

Cash Flow -2950.90
Monthly Over/Short -245.91

Debt Service
1st Mortgage 264900
Years & Rate 30/6
Payment 1589

Damn, bad sinkhole. I’d have to beat him up on price just to break even! :o

What is the formula you use to figure out the insurance?

I didn’t want to post a link if it was a really good deal but since it looks like a money pit here’s the link:

waht about upping rents and installing a coin laundry .and maybe an arcade game and a pop machine.

By the looks of the building there isn’t really any place to put any of those. Maybe the laundry but not the other stuff. With the layout of the house as far as I can tell there doesn’t appear to be a good common area to put it as all the the tenants have their own exterior door to go into the house. I can up the rents some and get him down on the price some but all in all with even that I don’t think that’s enough buffer for me. I need to be sure I am not digging in my own pocket and making sure I am actually getting something ($) for all of my effort, even if its only a few hundred a month.

how is the appreciation rate in that area 8% on $260,000 is an additional $1300/month ya know

Appreciation doesn’t pay the mortgage. :wink:

if yuo can break even for the first year and from the looks of the property :very nice : you should be able to then you can take a heloc out and us a little appreciation for yourself

Property is a dog man. you need a 3/3/3/ or 3/3/2 to make it no $$ down in this town. Everything is priced just out of reach to the no-low down investor. There are some good cash flowing condos though.

If you are a first time buyer in CT earning under 65k with decent credit you could get a CHFA loan. You could get 4.99% (currently) and and you would get a down payment assistance loan. Zero down, currently 4.99% interest. NICE Drawback: You have to reside on the property. Great way to do your first home, though.

Yeah there,s always that drawback.PRIMARY RESIDENCE …BLAAAA oh rules are rules.Ive stayed away from condo,s cant seem to find deals low enough to cover mtg and condo comando fees and rehab .

That’s just it, I’m not planning to live in the building. I am planning to stay where I am until I can get a nice SFH for myself. I have a large fish tanks and a lot of other hard to move stuff, can’t deal with moving twice. Not to mention moving means potential loss of some fish and with some of them in the $500+ range each I don’t like to chance it. :wink:

Also, the great part about not living there is that I can find something that flows cash that I wouldn’t necessarily want to live in myself. If it brings in $1k a month I don’t care if its full of section 8 losers as long as the checks clear. ;D

I found a decent 3/3/3 in New Britain, just gotta run the numbers and see if it will work. It’s in the nicer part of town, near the Plainville and Southington lines.

Speaking of condos how do you guys handle association fees? Is that covered directly out of pocket by the tenant or does the investor cover that and tack it onto the rent?

the owner in my area covers it but thats what Im saying . After condo commando association fees rehab and mtg all I can say is Where’d the profit go ?A 2/1 with a $500/month mtg and $175 commando fee and vacancy rate and maintnence (no matter how little) UMMMMMMMMM . I just cant find the condo thing to work cashflow wise.

Rich, I live in a condo. Make sure you carefully read the bylaws, and also realize they can and do change for ridiculous reasons. I’ve lived in mine for 10 years, and there have been so many stupid changes to the bylaws, it borders on crazy.

I’m sure people who have invested in condo’s can add to this. bottom line, do your due dilligence and then some with condo’s.

I live in a Condo and I decided to get on the board so I can keep an eye on the crazy things they add to the bylaws. Condos or neighborhood associations have a lot of power. Read the bylaws
As you know. In this business, negotiations are what it is all about.
One house, my buyers wanted a shed to close the deal.
When I was having the shed delivered. 3 - Three different neighbors came running and screaming. Its is in the bylaws. NO SHEDS .
I ended up adding an extra access to the attic from the garage and decking the floor.
That was still cheaper than adding on holding cost.



It’s a tradeoff. No exterior maintenance, snow-plowing, common area cleaing, building insurance, etc. in exchange for a monthly fee.
And I don’t get late night calls for anything that happens outside my walls.

I found that most condo boards are seriously concerned about the welfare and value of the propertiy. Nobody wants a monthly fee increase or a special assessment if avoidable. Sometimes it’s just not.

I, too get on the boards when I think the owners are running the place from their emotional roller coaster head instead of a business head. It’s a thankless non paying job but it protects my investment.

I’m on two boards right now and about to overthrow a 3rd ;D

I include the monthly maintenance fee in the rent. If the tenants were responsible for it and didn’t pay it, I can risk fines and foreclosure.

That all depends on the condo association. They are all different. Just as long as people do their due diligence, they should be ok. The condo association I live it can best be described as bi-polar. I’m sure all aren’t like this one. Just be aware of the association. They have a lot of power.

I’m staying away from condos…no way I am going to fight with Mrs Jones down in 134 over whether or not myself or my tenant can hang green curtains in the damn window. As a wise man once said…funk dat.

Still shopping for a place to buy…numbers just don’t work on many of them with zero down. Some of the lower priced ones seem ok but I’m not 100% sure what the rents are on all of them. Getting the rental information from these realtors via email is like pulling teeth.

Yippee, found a way into the MLS through a friend. Should be easier to find out the info I need. Getting sick of emailing realtors and not getting a response…this will definitely help.