If you bought this for $1150 a month, and your gross rents are $1200 a month; you will clear $16 per unit to be the property owner, manager, plumber, carpenter, etc…
Really, not a good deal.
What we don’t know is if the $400 a month per unit is lower than market rents and they can be raised. You need to determine the buy price and figure out the expenses and determine your max debt payments you can do. You don’t give us the property value, the expenses, and if these rents are low or high. Vacancy rates and actual expenses would be a good thing to have also.
You don’t give enough information and for only $16 per month per unit, how will you pay for apartment 1’s dishwasher when it goes out? There goes 6 month’s of cash flow.
I have a oppertunity to purchase a 3 family unit. I believe the price is right. The seller will do a Land Contract and finance almost the whole amount of the loan. I can’t get him to tell me his loan payments or how much he has in equity but he has only owned the property for 3 months.(He says its to far for his home to manage)The units rent for 400/month(1200)total/month income.He wants $1150/month to cover debt/taxes and insurance. I see no way to do this deal. Can someone help with ideas.I’m new at this so be nice.
Posted by Erick F. on February 07, 2002 at 11:04:32:
dh. I’m also new at this, but what I can tell you is:dont jump at a deal just becouse is there, be emotionaly detached and cover your assets. Do you numbers,title search,comparables,inspect the property,
even interview the tennants about the property and neighborhood. Ask yourself if you want to go another 6
months till you find the right deal or 6 months + of regret. Good Luck!
