Multi Family Unit question..from a newbie

So here is what I am thinking...

My question…

Say I can find an apt complex or a 4 plex for sale… Say the guy will owner finance for 5-10 years or whatever…
Say the cashflow everymonth at full occupancy is $500.00(just a made up figure)…

say it’s a 4 plex with 4 renters… The guy works with me and he will owner finance for 5 years…

I want to look at this simply… My question…

Why not hire out a property management company for 10% and just get a check every month…

IS IT THAT EASY… if not… then please explain… I want to move . I have read TOO much and not enough action… I want to start calling the paper this week and just jump in…

Jc

From what I have read, managers will take 10% of the gross rent. So say your 4-plex brings in $4,000 per month, you are paying your property manager $400…leaving you with $100 positive cashflow from your example. I may be wrong…

Good luck
Bill

We’ll, I am not a smart man by any means… but if it is a $4k gross and they get 400… then I would have 3600…

My example was if the total rents collected were 500.00 but the numbers aren’t really that important as to the method. If I can get the method right…then the numbers will work themselves out…

Management usually runs from 7-10% of gross rents. This is an incentive to, not only keep the vacancies down but keep the rent prices up…

EVERYTHING in real estate is negotiable!

Make sure that you have say in all decisions and make sure that they pass on what they pay in supplies straight through rather than paying $2 for a part and charging you $10…if you have no say in the tenant selection i believe your rental activities can change from active to passive and have an effect on your taxes…

Your example is unclear. There is a differnce between cashflow and gross rental income. If you have a $4000 gross income and a $500 monthly cash flow and you get management at 10%, your cashflow will drop to $100 because your management cost is $400 ($4K gross rent X 10%)

Clear?

Keith

Sorry I was just trying to keep it real simple…
I originally said $500.00 Cash Flow… meaning… Gross Rent… Remember I am new so I don’t know all the “right way” of saying things…

I was meaning after all bills etc… I have $500.00 but the money wasn’t the point…

The method is what I am trying to figure out and move on…

Thank you guys for any and all comments… I want to learn this so bad… I had a financial planner guy at the house tonight… He is a family friend talking about retirement etc… I was thinking the whole time… I want to do real estate SO BAD…

I wanted to ask the question whether anyone did multi-family unit investing. I was just on a site talking about buying apartment buildings, multi-units rather than single family homes etc. and my mind went zing! It makes sense to me.

With the multi-family unit you would have more options and more income possibilities.

Keep up abreast of your progress.

P.S. I love this site.

Will definately let everyone here know of the progress…

Jc

This is a great article, one of the best I have seen for a person at your level. Set byour investment profile and stick to it.

http://www.reiclub.com/articles/derive-capitalization-rate

Mark