Advice On 4family Numbers
I have been reading, researching and scouting for multi-familys (under 5-units) for a few months now and think I have come across a winner. I live in the upper westchester, lower dutchess county, area of new york so good deals seem to be harder to find here. I have worked on the numbers and here is what we have so far. I would appreciate any feedback on any holes you might see in my thinking. I of course don't want to sink money into something that doesnt work. I am waiting for the call from the listing agent to see it in person but this passed my preliminary number screening so I am trying to see it within the week. They usually are under contract within the week up here. Thank you in advance for your advice.
Taxes -4,953
Insurance -2,000
Heat/Hot Water 0
Utilities -360
Water -1,200
Maintenance/Vacancies -3,727 (I used the balance of 30%)
Mortgage Rate 5.75% (I have a lener who can do this as primary residence)
Mortgage Term (months) 360
Price 285,600
Down Payment % 5%
Down Payment $ 14,280
Mortgage 271,320
Monthly Mort ($1,575.80)
Monthly Taxes (413)
Monthly Expenses (690)
Bad Debts (170)
Total Monthly Expense (2,849)
Monthly Income 3,400
Net Monthly Cashflow $551
Rent 1 10,200
Rent 2 10,200
Rent 3 10,200
Rent 4 10,200
Rent 5 0
Total 40,800
Down Payment Financing
Rate 4.50%
Down 14,280
Mo. Cost ($82.94)
Thank you again for your thoughts
The numbers look good at first glance. I have a nice spreadsheet that I use to get a better idea of the Net operating income and another for the Return on investment and cap rate. PM me if you are interested.
Good Day to you:
Looks good, have you checked out their rental income statement for that property? You might want to increase your vacancy factor. It looks like you only have enough to cover a total of 3 months of non-rental income for one unit. Granted, I hope, that one unit won't be vacant for 3 months, but if 3 of your tenants decide to move during the next year, you will need to clean, paint, renavate each vacant unit and then re-rent it. Than usually takes about 30 days each.
Good luck and make $$$
Tom
I'm not from Peekskill, but I do own multifamilies in syracuse. Heat/hot water you have at 0.
I've never been able to get away with charging my tenants for heat, but those are 2 families. Maybe you can, and I'm just a a sucker.
Thank you for your comments so far, I am trying to get in touch with the listing agent now and will requet the Schedule E, as suggested on this site, to ensure the reported incomes are correct, as well as expenses. Is there another figure that is widely used for vacancy factor, other than 5%? I would like to be as realistic as possible with these figures rather than optimistic of course. Thanks again!
Oh, and in response to the heat issue, you'd be amazed at some of the houses I've seen here. The tenants pay for heat, hot water, their own appliances, renovations, of course these were some very low end apartments. Sad really, but tenants paying for heat seems to be relatively common in this area.
BTW,
What is the layout of the property?
Just curious to see the split- I imagine it as 5 2brs. is that correct?
This is a 4-family with 4-1000sq.ft. units each with 2 bdrm, 1 bath, and 5 total rooms, refrigerator and range included.