G
Guest14692
Guest
Shout out to G_Alexander, who inspired me both with mobile home investing and multi-family investing a few years back. On Friday, July 25th I closed on my first multi-family apartment building.
This property is precisely what I mentioned back in the STOP paying rent RE thread
https://www.thefastlaneforum.com/co...g-rent-live-for-free.51893/page-3#post-386141
It is a 4 unit home. Almost a motel-style one story on a concrete slab. Built in 1985. Roughly 3,300 sq ft.
The building was not for sale initially. I contacted the owners and let them know I was willing to buy. Got the call about 3 days later and starting writing up the contract.
Out of the 4 units, 2 are completely remodeled. The other two are still in very livable conditions, especialy given the location (low-median income rural village about 1 hour from both Buffalo and Rochester, NY). No damage, jut outdated.
Unit 1 - 2 Beds, 1 Bath
Unit 2 – 2 Beds, 1 Bath
Unit 3 – 1 Beds, 1 Bath
Unit 4 – 2 Beds, 1 Bath
They all came with the appliances and there is community laundry room.
I went into this deal initially thinking 3.5% FHA would suffice. However, because it was a 4 unit, I had to put 10% down. I barely made through the approval. Put 10% down under FHA lending and locked in a 3.75% 30-year mortgage. Affadavit states I need to live at the property for one year.
Deal Details
Cost summary:
$1,000 earnest money
~$23,000 due at closing
Capital Improvements:
No initial capital improvements necessary. The two units that are outdated have had the same tenants occupying the property for 5+ years. (One tenant has been there for 14 years).
+Monthly Cash Inflow:
Unit 1 rent: $475 - (Tenant received discount for living 10+ years, I am okay with honoring)
Unit 2 rent: $400 – ($500 per month -$100 discount for full property maintenance)*
Unit 3 rent: $500 – (New tenant just moved in 08/01)
Unit 4 rent: $0 - (Owner occupied. Also the best unit, being 2 bed and fully renovated- will be $550)
Laundry: Currently Free
Total:$1375while honoring the contract and living in the unit
Total: $1925 once it becomes non-owner occupied
*If I’m only staying for one year, I feel like I might as well accept this discount for the time being, and then he can continue to maintain the property once it becomes non-owner occupied
Once new tenants move in and discounts are taken off, I’m looking at $2050 in monthly revenue without any renovations
Mortgage, Taxes, Insurance: $972.86
Gas for unit 4 and laundry: ~$100.00
Water: ~$70.00
1142.85
Monthly Cash Flow:$232.15
Monthly Cash Flow after one year: ~$850.00
Short term: Live at my unit until it is legally permissible to leave, and fully maximize rental income
Mid: Tear up the rugs and put in new floors for the two units not renovated, charge $550/month minimum for all units which would take me to over $1,000 profit per month.
Long term goal: Acquire more properties. I’m thinking maybe a duplex in WNY. I would also like to expand my knowledge on real estate syndication. I interned at a commercial appraisal firm while working full-time and learned all about market research for enormous apartment buildings, where to find the resources online, who to call, what to study, etc. It was definitely a value-added experience.
-Joe
This property is precisely what I mentioned back in the STOP paying rent RE thread
https://www.thefastlaneforum.com/co...g-rent-live-for-free.51893/page-3#post-386141
It is a 4 unit home. Almost a motel-style one story on a concrete slab. Built in 1985. Roughly 3,300 sq ft.
The building was not for sale initially. I contacted the owners and let them know I was willing to buy. Got the call about 3 days later and starting writing up the contract.
Out of the 4 units, 2 are completely remodeled. The other two are still in very livable conditions, especialy given the location (low-median income rural village about 1 hour from both Buffalo and Rochester, NY). No damage, jut outdated.
Unit 1 - 2 Beds, 1 Bath
Unit 2 – 2 Beds, 1 Bath
Unit 3 – 1 Beds, 1 Bath
Unit 4 – 2 Beds, 1 Bath
They all came with the appliances and there is community laundry room.
I went into this deal initially thinking 3.5% FHA would suffice. However, because it was a 4 unit, I had to put 10% down. I barely made through the approval. Put 10% down under FHA lending and locked in a 3.75% 30-year mortgage. Affadavit states I need to live at the property for one year.
Deal Details
Cost summary:
$1,000 earnest money
~$23,000 due at closing
Capital Improvements:
No initial capital improvements necessary. The two units that are outdated have had the same tenants occupying the property for 5+ years. (One tenant has been there for 14 years).
+Monthly Cash Inflow:
Unit 1 rent: $475 - (Tenant received discount for living 10+ years, I am okay with honoring)
Unit 2 rent: $400 – ($500 per month -$100 discount for full property maintenance)*
Unit 3 rent: $500 – (New tenant just moved in 08/01)
Unit 4 rent: $0 - (Owner occupied. Also the best unit, being 2 bed and fully renovated- will be $550)
Laundry: Currently Free
Total:$1375while honoring the contract and living in the unit
Total: $1925 once it becomes non-owner occupied
*If I’m only staying for one year, I feel like I might as well accept this discount for the time being, and then he can continue to maintain the property once it becomes non-owner occupied
Once new tenants move in and discounts are taken off, I’m looking at $2050 in monthly revenue without any renovations
Mortgage, Taxes, Insurance: $972.86
Gas for unit 4 and laundry: ~$100.00
Water: ~$70.00
1142.85
Monthly Cash Flow:$232.15
Monthly Cash Flow after one year: ~$850.00
Short term: Live at my unit until it is legally permissible to leave, and fully maximize rental income
Mid: Tear up the rugs and put in new floors for the two units not renovated, charge $550/month minimum for all units which would take me to over $1,000 profit per month.
Long term goal: Acquire more properties. I’m thinking maybe a duplex in WNY. I would also like to expand my knowledge on real estate syndication. I interned at a commercial appraisal firm while working full-time and learned all about market research for enormous apartment buildings, where to find the resources online, who to call, what to study, etc. It was definitely a value-added experience.
-Joe
Dislike ads? Remove them and support the forum:
Subscribe to Fastlane Insiders.
Last edited by a moderator:
