Killface, am I reading it correctly... 380k for 18-20 units!? That's about 20k$ per apartment. In my area you need to pay about 10x that for one bedroom apt... are you talking about rural areas or some damaged buildings where you need to put some capital into renovating it?
Quote: (01-21-2015 11:38 PM)Killface Wrote:
I am acquiring about 800k of property this year. If I had 115k right now I would leverage it into a 70% LTV commercial loan into a 380k apartment building. This building would likely have 18-20 units. It should generate, at minimum, $7600 in gross rent per month (2% of purchase price). Do a detailed analysis to arrive at your expected net, including budgeting for maintenance and vacancy. In general, you can expect about a third of the gross rent as profit on a financed property. So you will net $2500 or so from this purchase, conservatively. You can find buildings on loopnet.com . Negotiate down about 25% off of asking price. If you can't find any that meet that criteria in that range, then keep looking and don't buy til you do.
Source: I am financially independent from rental property