cash flow (by shane [IA]) Apr 5, 2009 8:14 PM
cash flow (by RR [WA]) Apr 5, 2009 9:32 PM
cash flow (by Brad [IL]) Apr 6, 2009 4:36 AM
cash flow (by mike [MO]) Apr 6, 2009 5:56 AM
cash flow (by billy [MA]) Apr 6, 2009 7:13 AM
cash flow (by MARTIN [KY]) Apr 6, 2009 4:53 PM
cash flow (by shane [IA]) Apr 6, 2009 6:54 PM
cash flow (by shane [IA]) Apr 6, 2009 6:59 PM
cash flow (by John... [MI]) Apr 6, 2009 7:20 PM
cash flow (by Katherine [TX]) Apr 6, 2009 10:29 PM
cash flow (by Brad [IL]) Apr 7, 2009 5:00 AM
cash flow (by shane [IA]) Posted on: Apr 5, 2009 8:14 PM Message:
State Specific Question About: IOWA (IA)
Question about analyzing cash flow for a possible 4 plex property. If you look at current rent minus expenses (mortgage, prop. taxes, insurance and water) I am looking at $475 monthly cash flow. Property value approx. 75,000 and in fairly good condition, roof may be a bit suspect. Currently, at full occupancy and next to a local college so that shouldn't be a problem.
Any thoughts? Our ratios you usually us for quick eval.?
--97.114.xxx.xxx |
cash flow (by RR [WA]) Posted on: Apr 5, 2009 9:32 PM Message:
Looks decent, but cap rates really vary by area. If resale/appreciation potential is low, then cap rates need be higher.
What is the total gross rent? How much down?
Anything will cash flow if the down payment is big enough... --216.251.xxx.xxx |
cash flow (by Brad [IL]) Posted on: Apr 6, 2009 4:36 AM Message:
There are 2 big expenses that you didn't list...repairs and vacancies.
How often will you have a vacancy? 5% is the absolute minimum. Depending on your neighborhood, you may need to go as high as 25%.
You will have repairs. Carpet needs replaced, water heaters die, roof gets replaced. I recommend 20% to cover repairs (I use this estimate to cover postage, office supplies, advertising, etc)
Take your vacancy and repair rates and subtract them from your income. To me, cash flow is the money in my pocket after EVERY bill has been paid. --98.227.xxx.xxx |
cash flow (by mike [MO]) Posted on: Apr 6, 2009 5:56 AM Message:
I like to see 50% of the rent to cover Prin, Int, tax, insurance, 25% to cover fixed expenses like repairs, Prop Mgt, utiltiies, inspection fees, and then 25% to cover vacancies and positive cash flow --69.149.xxx.xx |
cash flow (by billy [MA]) Posted on: Apr 6, 2009 7:13 AM Message:
ive been paying about 25% or so for vacancies and repairs for my 3 fams in mass.dont forget that as brad and mike remind us.what about heat and elec?do tennies pay that? --208.58.x.xx |
cash flow (by MARTIN [KY]) Posted on: Apr 6, 2009 4:53 PM Message:
You say the roof is questionable.
That is a major repair. Brad IL is right on, you will have other costs and empty units at times that is a given. What about trash removal? Are there any other deferred repairs besides the roof?
More importantly, How do you get your $475 cash- flow? What are you putting down and what is your rate and term, based on what purchase price? Lots of verables... --74.215.xx.xxx |
cash flow (by shane [IA]) Posted on: Apr 6, 2009 6:54 PM Message:
why can't i see responses to my question? appears like 5 people have responded but i can't pull them up? --97.114.xxx.xxx |
cash flow (by shane [IA]) Posted on: Apr 6, 2009 6:59 PM Message:
ok $475 cash flow takes care of rent income minus principal, interest, water, trash, insurance, and property taxes.
heat and electric is covered by tenants.
looking at terms of 20% down (approx 15000) and a 7% arm.
don't you think a bank should be able to offer a little better rate?
any other thoughts on whether this will cash flow? variable will always be repair and vacancy i know, traditionally vacancy for this area is very low.
your knowledge and opinion appreciated. --97.114.xxx.xxx |
cash flow (by John... [MI]) Posted on: Apr 6, 2009 7:20 PM Message:
As people have said, if you want real comments on cash flow, then give the real numbers. Sale price, actual rents, and so on.
- John...
--207.241.xxx.xxx |
cash flow (by Katherine [TX]) Posted on: Apr 6, 2009 10:29 PM Message:
Property value doesn't mean squat.
What's your sale price?
What's your down payment?
What's the rent broken out by units, and total?
Count ALL possible expenses. I didn't see yard care or snow removal. Aren't you in Iowa? Its STILL snowing there occasionally this time of year. . .are you planning on cutting the grass?
To really help you we need specifics. So get very specific on your numbers and then we can calculate things.
I presume you are local to the properties and that there will be no fee paid to a property manager?
--64.12.xxx.xx |
cash flow (by Brad [IL]) Posted on: Apr 7, 2009 5:00 AM Message:
Assuming that you will be managing the units (otherwise you have to account 10% for management costs), take your rent numbers and multiply by 30%(repairs and vacancies). Subtract that from $475. How much do you have left?
Are the current rents reasonable? If they are $100 above market value, you may have a hard time rerenting at that same rate.
With 20% down, an ARM stinks, especially at 7%. You should be able to find fixed rate loan. --98.227.xxx.xxx |
Reply:
|
|