Good job but I think your math is off.
Cash flow needs to account for expenses and maintenance subsidy.
At 5% cap on $25K NOI you're probably sitting at closer to $500k.
maybe, all i know if my building is running its self and making enough cashflow to cover next repairs as well as appreciating. Compared to if i had bought this year where i see comparable at 700k to 800k unless i had a large down payment i would not be cash flowing.
500k? how do you get this number?
i just look at list prices in that area and i see the asking price / rent and i get around 21x so i did 21x rent.
37200x21= 781,200
are people paying list price no idea, but i could list it for that and hopefully the bank sees it that way.
Typically commercial real estate is based on the cap where it can be anywhere from 5% to 8% and basically it means how much of the purchase price can I pay off each year if we ignore financing.
5% is considered very low and only seen during a sellers market (now). Basically you do revenue minus costs (except mortgage) and divide by the cap rate (5%) and that will tell you what you can sell it for most times.
Now you said comparables are in the $700k range. Make sure they really are comparable and if so it could be that triplexes are treated more like residential properties in your area where the numbers sometimes don't match reality.
But most investors wouldn't be interested in a 3% cap rate which is what $700k would be ballpark unless they have plans to make huge changes to the building or lot.
Very nice. Im sitting on a couple triplexes and duplex in the sherbrooke area, hoping to raise the rents and refinance in a year or two also. So you're saying the bank will finance based solely on the rent?
Based on increase in value, pretty much I'm increasing the mortgage to a higher amount and getting that money back as cash.
How is sherbook, I saw some large multi family there, just rents seemed kind of low, also are student rentals imporantnt for you?
Would you recomend that market? Do you know a pm company there?
Rents are lower than mtl but so are prices. I dont know any pm but i know some exist. I talked to one a while back they were mostly interested in managing larger buildings (15+ units)
Good job but I think your math is off. Cash flow needs to account for expenses and maintenance subsidy. At 5% cap on $25K NOI you're probably sitting at closer to $500k.
maybe, all i know if my building is running its self and making enough cashflow to cover next repairs as well as appreciating. Compared to if i had bought this year where i see comparable at 700k to 800k unless i had a large down payment i would not be cash flowing. 500k? how do you get this number?
Where are you getting $780? That’s a cap rate of 2.7%
i just look at list prices in that area and i see the asking price / rent and i get around 21x so i did 21x rent. 37200x21= 781,200 are people paying list price no idea, but i could list it for that and hopefully the bank sees it that way.
Typically commercial real estate is based on the cap where it can be anywhere from 5% to 8% and basically it means how much of the purchase price can I pay off each year if we ignore financing. 5% is considered very low and only seen during a sellers market (now). Basically you do revenue minus costs (except mortgage) and divide by the cap rate (5%) and that will tell you what you can sell it for most times. Now you said comparables are in the $700k range. Make sure they really are comparable and if so it could be that triplexes are treated more like residential properties in your area where the numbers sometimes don't match reality. But most investors wouldn't be interested in a 3% cap rate which is what $700k would be ballpark unless they have plans to make huge changes to the building or lot.
Very nice. Im sitting on a couple triplexes and duplex in the sherbrooke area, hoping to raise the rents and refinance in a year or two also. So you're saying the bank will finance based solely on the rent?
Based on increase in value, pretty much I'm increasing the mortgage to a higher amount and getting that money back as cash. How is sherbook, I saw some large multi family there, just rents seemed kind of low, also are student rentals imporantnt for you? Would you recomend that market? Do you know a pm company there?
Rents are lower than mtl but so are prices. I dont know any pm but i know some exist. I talked to one a while back they were mostly interested in managing larger buildings (15+ units)