Ok, here’s the deal. Just got a tip on a 2 unit. Motivated seller ASKING $120K.
Rents: $1550 (could be $1650, he wasn’t sure if sec 8 tenant is paying $1050 or $1150). I am just looking for some insight from you vets. I think I know my answer, but looking for confirmation.
Sale: $120K (worse case purchase price)
Rents: $1550 (worse case)
Vacancy 5% ($930)
Gas: $200 (2400 annual)(seller pays gas $200 budgeted because there is only one meter) Don’t really like the one meter issue, but if it can cashflow…
I’ve calculated about $9300 annual debt services (taxes, gas, advertising, repairs, lawn care, maint.) so far, but haven’t added water or ins.
What am I missing?
Can this cashflow?
Should I even look at a one-metered building?
This place could use some repairs, (windows, which would definitely cut down that heating bill, other minor repairs which I’m capable of)
Or do I take the advise I most often hear?..“Don’t walk, RUN!”
I just realized the time, gotta run to meeting, so any help based off the above info would be great. Please let me know if any more info is needed.
Thanks. I figured as much, but wanted to run it past the experts. Good stuff, this site. The way I see it, that monthly loss number needs to turn around at least $264 to make it worth it to me.
I definitely could call the gas company. But I know from past experience (same situation with prior 2 unit), if the owner is incorrect, he’s not too far off from that $200. Also, the sec. 8 tenant portion is $150, which is why I believe her rent is $1050 and not $1150. Also, I’m sure that can be verified.
As far as the grass, well according to the owner, that was the case until the lawnmower came up missing.
You know what’s kinda cool, I have only been on this board a few months and I have already learned enough to know that his deal stinks. He would need to buy that house at around 77k to make it worth his while.
Thanks for the replies. When I was presented the deal by my friend, I told him this is not a good deal, which is what I meant in my post
I guess I was looking to see if I missed adding anything to my expenses so I could show him why it’s a no-go(he’s a newbie investor as well) AND hoping to get insight on the fact that is one-metered. Do any of you deal with this issue? How?
I got about the same number as Mike and I included the gas. What did we miss?
Taxes here are murder in some areas. I don’t even want to talk about the taxes on my personal home. Unfortunately I bought it BEFORE I found this site. Still kicking myself for that one.
The good thing about this is that EACH AND EVERYONE ONE of you were where I am now (learning and asking questions), so it’s just a matter of time I’m where you are.
To self: * wish I knew about this site before I bought & dumpted that 2 unit 4 yrs ago. * Man that was murder.
I NEVER buy any multi-unit buildings if I have to pay the heat (especially gas). I wouldn’t like to drive by a building where I was paying gas and see the doors or windows open in the middle of the winter! Additionally, gas prices are not stable and a big increase can absolutely decimate your cash flow.