Purchase In Pittsburgh, PA
Good Deal or Bad deal?
1. 4 unit, possible 5 unit, building. There are four finished units and the 5th unit is half-way finished.
2. Assested value of the property is 108,000 and I purchased it for 90,000 + Home Warranty.
3. Purchased it wil 100% financing. 1st loan 80% (rate 7.3%) + 2nd loan 20% (rate 9.2%).
4. rental income per month = $2,105.
5. taxes $3,800 per year.
6. loan payments $645/month
I will be adding a coin operated washer and dryer in the near furture which will increase monthly income.
It looks like a good deal based on what you have given, but a key is location. Will you be able to keep it fully rented? Will you get good tenants or will they trash the place?
The home warranty will help keep down repair costs while it lasts. How much deferred maintanance is there? Do you pay utilities? Manage it yourself?
Get that 5th unit up and rented, and the laundry in, and you could have yourself a real moneymaker if the answers to those other questions are right.
Good luck to you!
Chris
It is currently fully rented. It has a low vacancy rate. I will be managing this property myself. I have a degree in business from PSU and also I have had two other smaller businesses in the past.
I appreciate you taking the time to review this deal and expressing your views.
Just an additional comment....
Most home warranties can be renewed on a year to year basis. If you are anticipating a major repair that it covers in the future it may be worthwhile to keep it in force.
Jim
I was aware that you could renew these home warranties yearly.
I mentioned before that I am going to rehab this 5th apt. Are there state grant programs that will assist in these repairs? I am trying to reduce my out of pocket expenses as possible. Any ideas?