Anybody doing real estate?

Collapse
X
Collapse
 
  • Page of 1
  • Time
  • Show
Clear All
new posts
Previous template Next
  • buddyjuf
    • Aug 2026
    #1

    Anybody doing real estate?

    Where you live, what % down payment do you have to give on a triplex/fourplex in order to break even your mortgage payments with tenants rent?

    I was speaking with my agent today, and he told me that it will take me 25% down in order to break even every month. Is that reasonable?
    Tags: None
    • AllStar
      Confirmed User
      • Feb 2006
      • 461
      #2
      yep
      and you usually need 25% down by the banks if you are gonna rent it out too.
      WWW.allstarcontent.com

      Killer Content

        Comment

        • GTS Mark
          Vrume Mark
          • Jan 2001
          • 20912
          #3
          Fire your agent, he has no idea what he/she is talking about.

          I own a bunch of apartment buildings and the most I have ever put down is 15%

          DH

            Comment

            • latinasojourn
              Confirmed User
              • Oct 2003
              • 3191
              #4
              lots of variables here.

              1. depends on your location
              2. whether a property "cash flows" has to consider your personal income tax situation and your other tax shelters
              3. property condition
              4. existing financing, owner carry back availability
              5. current rental market, current vacancy factor, whether city has rent control ordinance
              6. number of units and existing rent roll, whether they are month-to-month, or on leases (effects your ability to raise rent and increase cash flow)
              etc
              etc
              etc

              that said, you can make some properties cash flow with 0-5% down in some areas, other areas might need 50% down.

              work with a knowledgable broker, very few on GFY have experience in this.

                Comment

                • latinasojourn
                  Confirmed User
                  • Oct 2003
                  • 3191
                  #5
                  Originally posted by DrinkingHARDEST
                  Fire your agent, he has no idea what he/she is talking about.

                  I own a bunch of apartment buildings and the most I have ever put down is 15%

                  DH

                  yes, i have never put more than 10% dp in any multi-unit bldg.

                    Comment

                    • latinasojourn
                      Confirmed User
                      • Oct 2003
                      • 3191
                      #6
                      Originally posted by latinasojourn
                      yes, i have never put more than 10% dp in any multi-unit bldg.
                      and, there is a reason MOST real estate agents do not own income property.

                      deal with a broker who does.

                        Comment

                        • Webby
                          Too lazy to set a custom title
                          • Oct 2002
                          • 14956
                          #7
                          Originally posted by latinasojourn
                          lots of variables here.
                          Agree - every package is entirely different and each needs a separate speadsheet assessment for viability - and realtors are not necessarily a source of commercial advice
                          XXX TLD's - Another mosquito to swat.

                            Comment

                            • buddyjuf
                              #8
                              DH, at 15% down, do your tenants cover mortage+taxes+put money in your pocket every month?

                                Comment

                                • woj
                                  <&(©¿©)&>
                                  • Jul 2002
                                  • 47880
                                  #9
                                  From what I hear, you need around 20&#37; to break even. To get 15% you need to find a great deal. Not sure what you consider being cash flow positive, but really what counts is long term. Short term it's pretty easy to be cash flow positive, but then one day you get a problem tenant, vacancies, furnace breaks, roof needs replacing, etc. One idiot tenant or one problem can wipe out the profits from the past year or 2. These costs needs to be considered in cash flow calculation too.
                                  Custom Software Development, email: woj#at#wojfun#.#com to discuss details or skype: wojl2000 or gchat: wojfun or telegram: wojl2000
                                  Affiliate program tools: Hosted Galleries Manager Banner Manager Video Manager
                                  Wordpress Affiliate Plugin Pic/Movie of the Day Fansign Generator Zip Manager

                                    Comment

                                    • qwe
                                      Confirmed User
                                      • Jul 2003
                                      • 2109
                                      #10
                                      was thinking about that too... but i decided that I dont know sh!t about that, and to be on a safe side, I might get just 1 condo and rent it out, and see how it goes...

                                        Comment

                                        • RawAlex
                                          So Fucking Banned
                                          • Oct 2003
                                          • 9465
                                          #11
                                          bdjuf, a very simple tip for you: There is very little new rental property being built in Montreal because rental board issues make it very, very hard to make money with rental property bought today. One of my neighbors is pretty big in it, but you need a combination of a cheaper property price, the money on hand to make major upgrades on the property, and the balls to raise rents and fight at the rental board.

                                          This isn't a good place to do rentals. Toronto is a much better market.

                                            Comment

                                            • buddyjuf
                                              #12
                                              Thanks for the sound advice yo

                                              Originally posted by RawAlex
                                              bdjuf, a very simple tip for you: There is very little new rental property being built in Montreal because rental board issues make it very, very hard to make money with rental property bought today. One of my neighbors is pretty big in it, but you need a combination of a cheaper property price, the money on hand to make major upgrades on the property, and the balls to raise rents and fight at the rental board.

                                              This isn't a good place to do rentals. Toronto is a much better market.

                                                Comment

                                                • onlymovies
                                                  Confirmed User
                                                  • Sep 2003
                                                  • 906
                                                  #13
                                                  Yes...just submitted a short sale package to the owners bank last week on a single family residence.
                                                  HomemadeVideoPass.com - High converting Homemade mega site!
                                                  StolenPornVideos.com - The hottest site on the web converting like crazy!
                                                  ReelPass.com - Offer your surfers 15+ exclusive movie sites for one low price

                                                    Comment

                                                    • Sly
                                                      Let's do some business!
                                                      • Sep 2004
                                                      • 31379
                                                      #14
                                                      Originally posted by DrinkingHARDEST
                                                      Fire your agent, he has no idea what he/she is talking about.

                                                      I own a bunch of apartment buildings and the most I have ever put down is 15%

                                                      DH
                                                      Wouldn't that be highly dependent on the market? I couldn't imagine doing 15% in San Diego. Even 25% would be tough I think.

                                                      Fairly decent house is $450k. Take off 15% and you're getting a loan for around $390k. What's the mortgage on that, about $2700-3000? The rent on my place is $1850 monthly, it would sell at around $450k.

                                                      Take off 25% and you're still looking at a $300k loan. Mortgage around $2000-2300.
                                                      Vacares - Web Hosting, Domains, O365, Security & More - Paxum and BTC Accepted

                                                      Windows VPS now available
                                                      Great for TSS, Nifty Stats, remote work, virtual assistants, etc.
                                                      Click here for more details.

                                                        Comment

                                                        • Quotealex
                                                          Confirmed User
                                                          • Sep 2001
                                                          • 6265
                                                          #15
                                                          Originally posted by bdjuf
                                                          DH, at 15% down, do your tenants cover mortage+taxes+put money in your pocket every month?
                                                          Yes with 15% down, you can still have a posive return on your equity.

                                                            Comment

                                                            • Peaches
                                                              Old broad
                                                              • Oct 2002
                                                              • 13933
                                                              #16
                                                              Whatever amount you put down, you still have $X invested in equity in the property (i.e. the downpayment, monthly equity payments, appreciation, etc.). Saying that you must put down 25&#37; to "break even" makes no sense. You can put zero down on it, invest the 25% elsewhere and still "break even".

                                                              When I was married we had a piece of rental property. We had 5% into it and the rent JUST made the loan payments. Where the money came in was the appreciation of the property.

                                                                Comment

                                                                • Peaches
                                                                  Old broad
                                                                  • Oct 2002
                                                                  • 13933
                                                                  #17
                                                                  Originally posted by Sly
                                                                  Wouldn't that be highly dependent on the market? I couldn't imagine doing 15% in San Diego. Even 25% would be tough I think.

                                                                  Fairly decent house is $450k. Take off 15% and you're getting a loan for around $390k. What's the mortgage on that, about $2700-3000? The rent on my place is $1850 monthly, it would sell at around $450k.

                                                                  Take off 25% and you're still looking at a $300k loan. Mortgage around $2000-2300.
                                                                  Rent and what someone paid for a house don't always match with each other. Many people LOSE money on monthly rent in areas they know are going up in value. And many people make 100% in rent on paid off properties - some where they might have bought it at 10% of what similar places are currently selling for. The market dictates the rental price, not always the price of the property. Renters couldn't care less what you paid for the house if the one next store is renting for less.

                                                                    Comment

                                                                    • chowda
                                                                      Confirmed User
                                                                      • Jun 2003
                                                                      • 9527
                                                                      #18
                                                                      it all depends on the deal. :D
                                                                      Someone finds you...
                                                                      2007

                                                                      PS: Nationalnet is the best host I've ever had. And i tried alot of them.

                                                                        Comment

                                                                        • Sly
                                                                          Let's do some business!
                                                                          • Sep 2004
                                                                          • 31379
                                                                          #19
                                                                          Originally posted by Peaches
                                                                          Rent and what someone paid for a house don't always match with each other. Many people LOSE money on monthly rent in areas they know are going up in value. And many people make 100% in rent on paid off properties - some where they might have bought it at 10% of what similar places are currently selling for. The market dictates the rental price, not always the price of the property. Renters couldn't care less what you paid for the house if the one next store is renting for less.
                                                                          bdjuf wants a cash flow positive property. And I'm 90% sure that DH only deals in cash flow positive property. If the mortgage alone is $2k (not including taxes, insurance, maintenance, management, etc) that means the property must rent for a minimum of $2k, more like $2.3k I would bet.

                                                                          What part of your statement am I missing? Or what part of my statement are you missing?

                                                                          This is about cash flow positive properties. Not flipping a house in 2 years because it "might" go up, which by the way is the reason a lot of people are filing bankruptcy right now. Oops.
                                                                          Vacares - Web Hosting, Domains, O365, Security & More - Paxum and BTC Accepted

                                                                          Windows VPS now available
                                                                          Great for TSS, Nifty Stats, remote work, virtual assistants, etc.
                                                                          Click here for more details.

                                                                            Comment

                                                                            • Quotealex
                                                                              Confirmed User
                                                                              • Sep 2001
                                                                              • 6265
                                                                              #20
                                                                              Originally posted by bdjuf
                                                                              I was speaking with my agent today, and he told me that it will take me 25% down in order to break even every month. Is that reasonable?
                                                                              Your agent probably meant that you "typically" need a 25% down-payment for a coventional loan from a bank!
                                                                              If you want to check out multiplex available, check out http://www.icx.ca/map.aspx?Mode=0&pt=218

                                                                                Comment

                                                                                • Peaches
                                                                                  Old broad
                                                                                  • Oct 2002
                                                                                  • 13933
                                                                                  #21
                                                                                  Originally posted by Sly
                                                                                  bdjuf wants a cash flow positive property. And I'm 90% sure that DH only deals in cash flow positive property. If the mortgage alone is $2k (not including taxes, insurance, maintenance, management, etc) that means the property must rent for a minimum of $2k, more like $2.3k I would bet.

                                                                                  What part of your statement am I missing? Or what part of my statement are you missing?

                                                                                  This is about cash flow positive properties. Not flipping a house in 2 years because it "might" go up, which by the way is the reason a lot of people are filing bankruptcy right now. Oops.
                                                                                  Right, but again, you're talking about tying up as much cash in a downpayment as you can to get a "postive cash flow". That's just not always necessary. That downpayment may well be better suited AS the downpayment, or it might make you more money if you invest it elsewhere and use the other investment proceeds to cover any loss you might see in rent.

                                                                                  High downpayments aren't ALWAYS good - there can be more money made elsewhere. It's like people who can afford to pay off their house, but instead, they invest that equity in something else that will bring them a higher return than the interest they'd pay on the mortgage. Same thing with rental property (or any investment).

                                                                                  And appreciation is important in all real estate - if you live in it, rent it out, sell it in a month or sell it in 50 years. Just because you put a higher downpayment on it and the rent covers your mortgage doesn't make it worth more And appreciation in an area usually means higher rents

                                                                                    Comment

                                                                                    • Peaches
                                                                                      Old broad
                                                                                      • Oct 2002
                                                                                      • 13933
                                                                                      #22
                                                                                      Originally posted by Alex from Montreal
                                                                                      Your agent probably meant that you "typically" need a 25% down-payment for a coventional loan from a bank!
                                                                                      If you want to check out multiplex available, check out http://www.icx.ca/map.aspx?Mode=0&pt=218
                                                                                      That's what I was thinking - it's more what's required to GET the loan, not make the investment a good deal.

                                                                                        Comment

                                                                                        • Barefootsies
                                                                                          Choice is an Illusion
                                                                                          • Feb 2005
                                                                                          • 42635
                                                                                          #23
                                                                                          Originally posted by Sly
                                                                                          bdjuf wants a cash flow positive property. And I'm 90% sure that DH only deals in cash flow positive property. If the mortgage alone is $2k (not including taxes, insurance, maintenance, management, etc) that means the property must rent for a minimum of $2k, more like $2.3k I would bet.

                                                                                          What part of your statement am I missing? Or what part of my statement are you missing?

                                                                                          This is about cash flow positive properties. Not flipping a house in 2 years because it "might" go up, which by the way is the reason a lot of people are filing bankruptcy right now. Oops.
                                                                                          Should You Email Your Members?

                                                                                          Link1 | Link2 | Link3

                                                                                          Enough Said.

                                                                                          "Would you rather live like a king for a year or like a prince forever?"

                                                                                            Comment

                                                                                            • onlymovies
                                                                                              Confirmed User
                                                                                              • Sep 2003
                                                                                              • 906
                                                                                              #24
                                                                                              Originally posted by DrinkingHARDEST
                                                                                              Fire your agent, he has no idea what he/she is talking about.

                                                                                              I own a bunch of apartment buildings and the most I have ever put down is 15&#37;


                                                                                              Completely agree.

                                                                                              Then again, not sure what market you guys are talking about. I'm stick with the distressed property market. And i'll tell you that 99.9999999999999% of the real estate agents have no clue about anything when it comes to distressed property / foreclosure markets. It's a joke when YOU have to teach THEM about what you're doing.

                                                                                              The short sale we're working on now is no money down directly with the owners bank. Same was the past forclosure properties.

                                                                                              I won't touch a deal if there's an agent involved..they fuck everything up. You hire agents AFTER the deal is done with the owners to push paper and close the deal..but never involve them in the process....that's what the lawyer is for. Just my opinion though.
                                                                                              Last edited by onlymovies; 01-28-2007, 03:19 PM.
                                                                                              HomemadeVideoPass.com - High converting Homemade mega site!
                                                                                              StolenPornVideos.com - The hottest site on the web converting like crazy!
                                                                                              ReelPass.com - Offer your surfers 15+ exclusive movie sites for one low price

                                                                                                Comment

                                                                                                • jryan89
                                                                                                  Confirmed User
                                                                                                  • Nov 2006
                                                                                                  • 818
                                                                                                  #25
                                                                                                  Why the fuck would you buy something that takes a 25&#37; down payment to break even???

                                                                                                  What if one of the tenants moves out? now u r fucked!

                                                                                                  How many properties have u looked at? I suggest looking a little more and finding some people who know wtf they are talking about...

                                                                                                    Comment

                                                                                                    • SomeCreep
                                                                                                      :glugglug
                                                                                                      • Mar 2003
                                                                                                      • 26118
                                                                                                      #26
                                                                                                      Originally posted by bdjuf
                                                                                                      I was speaking with my agent today, and he told me that it will take me 25&#37; down in order to break even every month. Is that reasonable?
                                                                                                      Depends on what price you buy the property at and what you can get people to pay for rent. If you payed 100% of the down payment, you'd not pay any mortgage at all and all the rent money would be profit. Now figure out how much you'd need to charge for rent if you only put a 25% down payment and had to pay x amount mortgage.

                                                                                                      Webair Hosting

                                                                                                      I use and recommend Webair for hosting.

                                                                                                        Comment

                                                                                                        • buddyjuf
                                                                                                          #27
                                                                                                          Originally posted by Peaches
                                                                                                          Whatever amount you put down, you still have $X invested in equity in the property (i.e. the downpayment, monthly equity payments, appreciation, etc.). Saying that you must put down 25% to "break even" makes no sense. You can put zero down on it, invest the 25% elsewhere and still "break even".

                                                                                                          When I was married we had a piece of rental property. We had 5% into it and the rent JUST made the loan payments. Where the money came in was the appreciation of the property.
                                                                                                          no doubt yo,

                                                                                                          but I'm putting appreciation aside. only looking at rent received and mortgage/tax payments

                                                                                                            Comment

                                                                                                            • tiger
                                                                                                              Confirmed User
                                                                                                              • Apr 2002
                                                                                                              • 6986
                                                                                                              #28
                                                                                                              Hard to break even anywhere even on a fourplex. But there are a few places. Try Austin, TX you can get a duplex with 5-10&#37; down and cash flow a couple hundred bucks a month.

                                                                                                                Comment

                                                                                                                • slapass
                                                                                                                  Too lazy to set a custom title
                                                                                                                  • Nov 2002
                                                                                                                  • 14625
                                                                                                                  #29
                                                                                                                  Yes

                                                                                                                  Yes

                                                                                                                  But you can find deals. The crazy thing is your main business makes cash so I would devote more time to that and just buy a really nice property that is cash flowing. I buy commercial real estate with my left over cash. It makes around 18% a year return in the long run. I put 25% down or so.

                                                                                                                  I used to do real estate full time so i know about good deals etc and finding something 10% below value is not that hard in smaller stuff. As you get bigger it is harder and the real gems of 20-25% off are almost non existent. So on a 250k deal you are maybe going to save 25k after months of looking. If your business makes more then that, you might want to just think about focus.

                                                                                                                    Comment

                                                                                                                    • wyldworx
                                                                                                                      So Fucking Banned
                                                                                                                      • Dec 2006
                                                                                                                      • 5144
                                                                                                                      #30
                                                                                                                      i rent housing commission, and lick homeless mens nuts....

                                                                                                                        Comment

                                                                                                                        • Quotealex
                                                                                                                          Confirmed User
                                                                                                                          • Sep 2001
                                                                                                                          • 6265
                                                                                                                          #31
                                                                                                                          Originally posted by slapass
                                                                                                                          finding something 10% below value is not that hard in smaller stuff. As you get bigger it is harder and the real gems of 20-25% off are almost non existent. .
                                                                                                                          It usually the opposite simply because there are more potential buyers in the smaller price market than the higher stuff.

                                                                                                                            Comment

                                                                                                                            • strobi
                                                                                                                              Confirmed User
                                                                                                                              • Nov 2002
                                                                                                                              • 7383
                                                                                                                              #32
                                                                                                                              Bump up top, interesting thread! I love reading about real estate

                                                                                                                                Comment

                                                                                                                                Previous template Next
                                                                                                                                Working...