Re: Lets run some numbers - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on September 14, 2003 at 23:09:41:
Well, perhaps you will have similar figures. Can you be sure? Perhaps he has let stuff slide? Maybe in the two years before those three years he did a whole passle of major work, with a lot of expenses?
Could you find similar properties in the area and ask the owners of those properties about the expenses?
I’m not even saying that this seller is being dihonest. Just that the numbers are far below what most apartment complexes cost. When you say a unit is one bedroom, do you mean it does not have a kitchen and does not have a bathroom? If those are in not there, the expenses can be lower. Are there separate heating and cooling units or one big unit for the whole house?
Did you include the taxes and insurance? I’m assuming that your figures for the loan payments are strictly P & I. I checked and your monthly debt payment figure would be right if the first loan were ar 8% for 30 years and the second is as you mentioned.
So, are you including the T & I from the schedule E? Have you talked with insurance people? Insurance rates have gone up dramatically in the past couple of years.
Again, I ask have you looked at a lot of investments so you know that this one is a very good one? Even using your expense figures, this would be a poor money-maker, in my opinion. Less than a hundred dollars a month per unit positive cash flow. Unless you expect significant appreciation, this is definately on the low side.
If you are a beginner, please realize that very few properties being offered for sale on the open market are good deals. Most are not. This sounds like one of the “most” to me.
GOod InvestingRon Starr