Posted by JB in MD on June 04, 2000 at 01:15:09:
I will admit that I don’t know the first thing about multifamily units, but what I believe I do know is that you need to figure in a factor of 40% of monthly revenue for things like vacancy, hot water heaters, new roofing and other general maintenance issues. If you figure debt service of $1800 (using the 1% rule)per month on your $180k financing and then add $720 (40%) to it you get $2520. You are only clearing $2500 per month in rent. Like I said, I really don’t know anything about this type of deal, but I don’t see that there is any cashflow here to make this worthwhile. I don’t see the deal here. I could be all wet so, please, wait for others to reply.