Would You Buy This Property?

Comments(14)

• 
  BethE10th December, 2003

  The cash flow looks like it might be promising. Are the rents set at market? Above? Below? What is the vacancy rate? What is the market value of the property? After finding these out and more...I'd pursue it...[ Edited by BethE on Date 12/10/2003 ]

• 
  Sash10th December, 2003

  Hi Mr. Mike
  
  It does look like a nice little deal. In addition to what BethE said to check out, I'd suggest finding out what the owner has been paying for electric, water and trash for the past 2 years.
  
  Mike

• 
  InActive_Account10th December, 2003

  If you want to buy and hold it looks like a good purchase, you are going to sell it then it appears like a worthwhile project. Obviously there is alot of questions that need to be answered, such as those posted above. If you go the “Tools” section there is an advanced mortgage calculator. It has alot of good variables that novices and seasoned pros' tend to miss. Best of success.
  
  Phil
  
  See profile for contact information

• 
  PayCheck10th December, 2003

  Is the owner responsible for utilities because the units share meters? If so find out in which unit or where is control for the settings for heat / air located. Call local electric, gas, water & sewage to find monthly averages. If cash flow is still positive after utilities, taxes, insurance, and mortgage if any, proceed with sale. Make sure you do all inspections. If the units share one heating and air make sure it is efficient and most definitely do a termite inspection. $120,000 for 7 units sounds like a steal. That's my two cents.
  
  Paycheck

• 
  joel10th December, 2003

  Use the new Proformanator on it and see what you come up with.
  
  Click on MyTCI > MyTools > Proformanator

• 
  MrMike10th December, 2003

  I did use the TCI tool and got what I consider to be a WHACKY result that is the reason I posted this thread.
  
  
  
  This is what the TCI tool said:
  
  Don't purchase this property. This property is not going to make any money for you whatsoever.[/
  
  Rents are at or slightly
  below market.
  
  Cost of utilities averages $800 a month which owner pays.
  
  Vacancy rate 10%.
  
  Don't know market value of the property, it has been difficult to find comperable sales in the area.
  
  
  
  
  
  [ Edited by MrMike on Date 12/10/2003 ][ Edited by MrMike on Date 12/10/2003 ]

• 
  GFous10th December, 2003

  MRMIke-
  
  Why have you not put your location in your profile? I always find it interesting when reading about properties to know what part of the country they are in.
  
  Numbers look okay to me. I would put ofer and then in due diligence check all the expenses and rents to confirm.
  
  
  
  _________________
  Gregg Fous
  Investor/Developer
  
  "Developers Make it Happen"[ Edited by GFous on Date 12/10/2003 ]

• 
  davmille10th December, 2003

  I'm sure there is someone out there who has made money on units where the landlord pays the utilities. I DON'T KNOW THEM. It is unbelievable how high utilities can be when the tenants are free to use them as they please. People are always trying to unload these properties after a a hard winter or summer. If you can't get it at a good enough price to seperate all the utilities, I wouldn't buy it. It is much better to be in control of where your money goes than to have the tenants in control of it.

• 
  Shirley10th December, 2003

  If you just need individual metering so the tenants pay for the utilities, it might be worthwhile to have these installed. I've been in the electrical industry for over 13 years now. A company called E-mon makes what is called a demand meter. These cost about $250 each. They could easily be installed for each unit by an electrician and every month you could bill the tenants for the electricity. Or just have regular meters installed for each unit.
  
  Being from California, there is no way I would pay for the electricity. After the last couple of years, my utility bill is still double what it used to be.

• 
  dominion10th December, 2003

  All of the positive posts are dead on. I would also find out from the owner, what percentage of his rents go past due on a regular basis as this will cut into profits. Otherwise, unless he's charging under $500/mo per unit or maintenance fees are astronomical, you should persue this deal. Good luck

• 
  ahmedmu10th December, 2003

  I put your numbers in Proformanator, and about 20k in utilities, still got positive cashflow generator; this property rocks, it said.

• 
  ahmedmu10th December, 2003

  Sorry, I made a mistake. I put low numbers as costs, those should be annual, not monthly.

• 
  MrMike10th December, 2003

  Quote:
  On 2003-12-10 03:35, GFous wrote:
  MRMIke-
  
  Why have you not put your location in your profile? I always find it interesting when reading about properties to know what part of the country they are in.
  
  Numbers look okay to me. I would put ofer and then in due diligence check all the expenses and rents to confirm.
  
  
  
  _________________
  Gregg Fous
  Investor/Developer
  
  "Developers Make it Happen"
  
  <font size=-1>[ Edited by GFous on Date 12/10/2003 ]</font>
  
  
  Thank you for the suggestion.
  
  I updated my profile.

• 
  MrMike10th December, 2003

  Quote:
  On 2003-12-10 09:09, ahmedmu wrote:
  Sorry, I made a mistake. I put low numbers as costs, those should be annual, not monthly.
  
  
  Ahmedumu,
  
  I did the same thing when I first used it. I thought the expenses you entered were per month but they are per year.
  
  Funny thing is I increased the income by a mere $200 income per month and it went fromsaying VERY BAD to saying that it was a great investment.