QUOTE (Runman @ Nov 12 2009, 07:57 PM)
Hey all,
I was wondering everyone's opinion on what a average to good 7- plex should produce in monthy cashflow?
Obviously, it's based on region and other multiple factors, but let's say in the Saskatchewan, Alberta, and Manitoba Regions.
Thanks
Josh
cash-flow is a function of MORTGAGE !
More cash-flow with lower mortgage !
NOI = gross rent - vacancies - operating expenses (management fees, utilities, insurance, R&M, property taxes, advertising ..)
rents can be anywhere from $400 to $1400 per unit depending on suite size, location, quality
Op expenses run from about $3000 to $4000 per unit per year
Example:
so using $800 for rent times 7 * 12 = $67,200 in rent
10% vacancy and non-collection = $60,000
expenses of $3500 times 7 = 24,500
= cash flow of 35,000 before mortgage and major repairs/upgrades like: new carpets, new fridges, new roof, new boiler ..
mortgage of say 400,000 @ 6% using a 25 year amortization = $32,000 roughly
thus: a slightly positive property @ 6% interest rate .. but with a CMHC insured 4% mortgage a cash-flow of about $10,000 ..
Related posts worthwhile a read related to getting started .... and multi-family especially !
5 ways to make money
http://myreinspace.com/public_forums/General_Discussion/61-3347-5_ways_to_make_money.html
How to get started
http://myreinspace.com/public_forums/General_Discussion/61-4391-How_to_get_started_.html
Multi-Family Primer in May 2009 Issue of Canadian RE Magazine:
http://myreinspace.com/rein_members_only1/Members-Only_Discussion/81-10996-Multi-Family_Primer_-_May_2009_Issue.html
Equity Gain not the only way to make money in RE:
http://myreinspace.com/public_forums/Real_Estate_Discussion/62-10711-Equity_is_not_the_only_way_to_make_money_in_real_estate.html
