O.K is this a good deal for a first timer?
asking price 169,000
7 unit house
average rent for each is 400
monthly payments would be around 850.
The house is near a major state university and I will need a property manager. So is this a good deal.
Is this legal as a 7 unit house? Are you renting by the room? Does that make it a rooming house? Is the property zoned for this? Have you checked on insurance for a rooming house or whatever this is?
If the rental is legal and if the year around rent is $2,800 per month, then this is worth pursuing. If everything else checks out, my max purchase price would be about $140,000 or 70% of the market value, whichever is lower (if I were buying it).
Mike
This is not a good deal.
You’ll be getting a loan for $169,000 I take it, giving you a monthly mortgage payment of around $1240 (30 years @ 8.0% interest)
Gross rents will be $2800
Using real world operating expenses you would be spending about $1400 each month leaving you $1400 to pay the mortgage.
$1400 - $1240 = $160 or $22 per unit
Is this a good deal? No.
Er, I misread the post, I thought it was an apartment building, my bad.