How would you calculate a positive cash flow for an apartment bldg?
154451
Total up all the rents for the year and then subtract out all the expenses.  Taxes, any utilities the landlord pays, etc.  Make sure to factor something in for future maintenance.  There will be some big ones - roof, furnace, windows...
570206
Take the $400,000 for the land out of your equasion... Your going to need to have purchased this before the builder really is involved.\n\nFor the rest... Your going to pay permit fee's to the city/town for your building permits, design review etc... Your going to need to have paid your architech and structural engineer for the plans they are going to draw for you which you will be turning over to the city for approval as well...\n\nOnce you get to the builder the deposits may have to go through your lender if your doing a construction or construction to permanate loan for the property purchase and building. \n\nWhen doing a construction loan usually there are draws spelled out in the loan. Draw one maybe for the land purchase, architech/engineer and permits. Draw 2 would be for the builders deposits based on the materials needs for the first phase of construction and so on...\n\nIf your financing this yourself then check with your states contractors licensing entinity... There are specific percentages a contractor can take as deposits based on the work to be performed and this will vary greatly by state. I would check with the state anyway just to verify the builder is licensed, does he/she have any complaints on their license? How were those complaints resolved? Check on their insurance as well. If they are on your property and the insurance is not in place or is not up to snuff you may have to pay a claim out of pocket or against your own insurance.\n\nGood Luck
285729
You might check out the Small Business Administrations web page...Good luck and happy renting!
647084
You can't get a buildout estimate from someone on Yahoo whose never seen your building. There's too many variables to consider. What you spend has to do with the decisions you make, and how much structural work, plumbing, HVAC improvements you need. Whether you have to replace the water heater, electrical work, fixtures, the size of ventilation system and grease trap, not just that you need them. Flooring surfaces can range from $2.00 per sq. foot to $25 per sq. foot. The type of finishes you choose will effect the price. The types of tables and chairs, in addition to how many you put in.\n\nYou're asking a question that can't be answered on here. Small, low rent restaurants could range in price from $20,000 to open, up to $300,000 or more.\n\nDetermine your opening costs by building a business plan off a rough overhead sketch of the operation. A beginners blueprint. Include everything you can think of, then organize into separate spreadsheets and price them out. You should have a spreadsheet for furniture, fixtures and finishes. You should have separate ones for kitchen equipment including your ventilation and grease trap, another for office equipment and supplies including any POS hardware and software or televisions and music systems throughout the restaurant, a smallwares list, beginning paper goods inventory, beginning linen inventory, beginning food inventory. Make a separate buildout spreadsheet with everything for the bathroom including fixtures, finishes, etc. This will make it easier to estimate the cost of a second bathroom if you need two. You then need a list of any permits and fees you'll have to pay to open.\n\nTake all this information to an architect. The architect will see costs you hadn't prepared for and will build a real blueprint. \n\nAfter you have everything priced out and suppliers for everything chosen, take the blueprint and your buildout lists to at least three quality construction companies and ask for bids. Don't try to shave expenses by using a budget general contractor, you'll regret it when your job isn't finished on time and it will end up costing you more in lost time than for paying a quality company. Ask for ideas from each company to save on your existing plan.\n\nIf you need help with any of this, or want to purchase some example templates to build a better business plan, contact me through my website. I give free initial consultations.\n\nBrandon O'Dell\nO'Dell Consulting\nRestaurants/Retail/Bars\nbodell1@cox.net\nhttp://www.bodellconsulting.com
308494
Depends on what your goals are for the property in question. Are you looking to hold onto the property for an extended amount of time or looking to flip in 12 months? Are you looking for cash flow control, or do you want to know what your payments will be every month? How much are you willing to place down for the new property? \n\nMost lenders will require you to place down a minimum of 10% towards the property, meaning that you would receive an 80/10/10 loan. Your interest rate because of the fact that it's an investment property will vary from lender to lender, however it will be higher than an O/O property. Your second will be the killer for interest rate. Because your interest rate for the second will be outrageous, you might want to entertain the idea of MI, it might be less than the fully amortized amount of a second loan.\nAgain, depending on your time frame that you want to hold onto the property will determine the program that you enter. If you’re only looking to keep the property for 2 years, then there is no reason for a 30yr fixed program. However if you plan on holding it for 30yrs you might want to entertain an ARM to reduce your monthly obligations.\nThe Pay option ARM is very popular with investors since it allows them to control the cash flow of the payments. However it is a one month adjustable and they normally want a larger down payment. You would have to calculate your cash on cash return to determine if this is an option since you'll be placing down about 25% of the purchase amount. There is a formula you can use to determine cash flow /deferred interest and appreciation to determine how effective the program will be for you. Again, it really depends on a lot of factors as the investor that you need to decide and then find a vehicle that will assist you in reaching it. If you have any other questions, you can contact me directly.
1148604
1.  Get property appraised first.  You may be off on your calculations, but get it appraised first to see if your deal is viable.\n\n2.  Next if the valuation is high enough, contact a bank to get a reconstruction loan.  This will be a loan for aquisition wrapped with a construction loan.   The construction loan part will be variable and paid out of a drawing account payable at stages of the reconstruction.  The stages and estimated costs will be estimated at the beginning of the loan process defining what defines completion of a stage and how much money will be released.\n\n3.  Upon completion the loan will convert to a permanent with the entire amount amortized over the target period ie 25yr.\n\nYou will want to get a good flag and mgmt company, but more importantly you are going to need to carry some working capital as you should not expect to break even the 1st year especially considering the size of loans.\n\nIf you are interested you can contact me directly as I've consulted on similar deals.  I can arrange Gen Contractors as well as permits and financing as well as help you with some techniques to minimize your exposure in the deal and maximize your ROI.\n\n\nGood luck either way.  Remember 90% preparation in these types of complex deals.  Your financial structure will dictate your success.
69706
Divide your total sales for the year by the number of square feet.  (Sales$/sqft)  The number should be much higher than your rent per square foot or your business will be short lived (seen this!)  There's a rule of thumb, if I recall correctly, you want at least 2x more sales / sqft than your cost/sqft.
941555
Seriously, where to put your money depends very much first on how much money you have in the first place and then what kind of investment objective you have.\n\nIf you have a very large fund and your objective is stability and protection without regards to short term cashflow issues, you may want to keep your money in government bonds and Floating Rate Bonds. A good mix of these will allow you to hedge against interest rate risk involved in government bonds and give you the stability of bonds.\n\nIf you have a very large fund and your objective is stability and protection but you also need monthly or daily cashflow for your livelihood, then perhaps it is better to keep your money in high end real estate in mature areas, earning a relatively lower annual growth but with more stability. That being done, you should rent the place out in order to generate your monthly cashflows.\n\nIf you have a small fund and your objective is stability and protection with no monthly cashflow need, then you simply have to compare which bank gives you the best return on their fixed deposit an park it there.\n\nIf you have a small fund and your objective is stability and protection with cashflow need, then you probably might want to consider to buy a small rental unit for rental income or learn to do covered calls on the local index.\n\nInterest rates fluctuate all the time. The interest that you see displayed on the board today can change by next month. So, comparing interest rates on saving accounts is by no means certain what you will get in the long term.\n\nThere are a lot of avenues and ways to keep and grow money and if you are looking only at banks and saving accounts, then perhaps it is time you start to do more reading and research on the area of finance. It is a wild wild finance world out there and there is no end to the new products and investment avenues that are being created daily. Depending on your personal financial situation and your personal investment objective, you need to be able to figure out what works for you and if you are unable to do that, prehaps it is time to engage a personal investment or finance adviser. \n\nJust remember one thing, there is no such thing as "The One Perfect Way To Keep And Grow Money". Everything comes with a catch. Higher returns will come with a longer tie down period putting that money out of use for the short term and is frequently, but not always, more risky. Lower returns are frequently more stable and safer but does it mean your personal retirement needs by the time you need that money?\n\nMoney is a complex issue for the uninitiated but a pressing one. And that is exactly why it is so hard to make the right decision. Making the right decision takes the right knowledge and the right knowledge these days only comes with more reading and research. \n\nOne fact remains true despite all these talk, and that is, there is no safer way to grow money, keep it safe and fight inflation than taking personal charge of your own money instead of leaving it in the hands of any external agencies. Start learning today....\n\n\nHope these helps.\n\nP.S There may be people who hates paypal for some reason but that does not mean that it is a hell full of devils. I have worked with Paypal and grown my business with Paypal for the past 3 years and have found them to be extremely reliable.\n\n\n\n\nhttp://www.mastersoequity.com \n\n\n\n\n\n.
396315
It depends where you are. Location is everything in real estate and retail. If you need estimates for your local area, contact your regional building authority or your local chamber of commerce, who can guide you to the proper source.
43542
Of course, you need to understand how the numbers work and when it is better to invest long-term or short-term. BUT GENERALLY, purchasing a four-plex, living in one and renting the others is a good strategy. The really great things is that lenders usually consider this a “single family” loan rate as opposed to a commercial loan. Also, if the units have a rental history, you can count the rental income as part of your income to help you qualify for a larger loan. You can get an “owner occupied” rate on the loan, stay in the complex for year or two, then move to another one and just keep collecting four-plexes. If you keep this strategy up for many years, assuming your area is appreciating at even an average rate, you will be able to retire on passive income within15 years, perhaps sooner!\n\nThe bank counting the income from the other units toward your annual income, is reason enough to purchase existing units at this point in your investing program\n\nI wish you the best in all that you do.
771615
Man... where are you going to find a fourplex for 100-200k?  Madagascar? Somalia? Sudan?  Just kidding, but that's pretty "down market".  \n\nHere's some tips:\n\n1) You can get an investment for around 4x-6x your salary from a bank. Think around 120k-180k. \n2) You can generally get something that is 80% levered (where you put 20% down and even more levered if you have good credit/reserves). Sure, you can get 100% financing - but you don't want to stretch yourself to the breaking point. Tighter credit policies also make it difficult to get more financing. Don't do exotic financing like negative amortization or interest-only as you can lose your shirt easily. Go 30 or 15 year fixed. \n3) Don't go so cheap on the four-plex (speaking from experience as I owned a fourplex).  It is better to deal with a single unit that costs the same. Your tenants are a) going to take MUCH better care of your place because they are generally more respectful of property, b) you'll have less people living in your place doing wear/tear/accidents and c) you will have less headaches managing fewer people. \nPeople do REALLY stupid things with your stuff, especially when the deposit is only a few hundred bucks instead of $10,000... my person experience, tenants flood the bathrooms, put the washing machine outside, shoot out all the lights with a bb-gun, dig up the decorative tree in the front yard, go four-wheeling on your lawn, iron on the carpet, knock down a fence, pay late, skip rent, dump trash outside, dump their kiddie pool water next to the building, bash in closet doors.  Each small thing will cost you 1-12 months in rent lost money at the low end.  My single unit place in California that cost 3x as much as my four-plex had much fewer tenants, less wear and tear, no headaches, was easier to sell and netted more money (downside was lower average occupancy).  \n5) Start with a single-unit fixer upper in a working class neighborhood.  Don't invest too much money in fixtures that don't have a positive return.  Put your "sweat capital" into things that make it habitable (e.g. painting, fix the plumbing, make sure the doors/windows/roof all look good). I'm not saying you sould be a cold-hearted slum lord, but don't waste money on things with negative NPV. \n6) Unfortunately, it takes money to make money. Get a good job.  Take side classes/certificates/degrees to make sure you can make more money in the future.  It took 10 years for me to make enough money, but once I did, making money was much easier when you have money. Learn about investing.  Knowledge is very powerful - which you can then use to make your money work for you.  Read, read, read.  Go to the library. Borrow books from friends. \n7) Don't be afraid to take some risks.  You are going to screw up. You are also going to do things very well.  But you need to take risks to get ahead.  When things go wrong... and they will go wrong... take self-responsibility (i.e. don't blame someone else) and learn a lesson for the next time. \n8) Cut way back on your spending.  It's going to suck, but you can turn your sacrifices into cash, which you can then use to fuel your investments.  Don't play the "keeping up with the Joneses". You don't need the latest gadget, a new car, new clothes, take-out dinner, the nice cut of steak, the fabbo trip.\n9) If you REALLY feel like you need to invest now, get friends to invest with you.  However, make absolutely sure you have a contract that is iron-clad.  Designate a chairman, voting system and equity rules because friends/family and money don't mix.  Some will flake and not work their share. Some will want to do it their way and only their way.  Some will want to back out if things go badly.  I will never work with family/friends.
686300
the fish don't have to walk. \nIt depends upon several factors one your credit got to have good credit. \nsecond condition on investment property it's kinda hard \nif it's a primary residence it a piece of cake. \nin your offer to purchase as for say 4,000/ or estimated closing costs to be paid by the seller if they don't want it to come out of there pocket wrap it into the purchase price.  \nget two loans an 80/20 \nI do this all the time for my clients, most of the time they leave to closing table with a couple hundred in there pocket
1091858
First calculate your anticipated revenues.  \n\nThen break your expenses down into two categories:  fixed (meaning the amount is the same every month) and variable (meaning the amount will fluctuate depending on variable factors).  \n\nEstimate your revenues using best case scenario and also worst case scenario.\n\nCalculate your expenses accordingly.  First your fixed costs and then your variables.  Your percentages should be based on industry standard, or your personal knowledge and expertise of the business.  \n\nYou may have to research similar industry trends, but on average, 50% will be fixed operating costs, 35% will be variable operating costs and 15% will be other expenses.\n\nModel your forecast on the best case, worst case and median revenues you've projected.
579903
Here's some resources for you regarding 'cash flow'\n\n"Understanding Cash Flow (Finance Fundamentals for Nonfinancial Managers Series)"\nhttp://www.amazon.com/gp/product/0471103861/qid=1147979569/002-1968004-3028845\n\n"How to Better Manage Your Cash Flow\nThese four steps will help you keep track of the money coming in and out of your growing company."\nhttp://www.entrepreneur.com/article/0,4621,312291,00.html\n\n"You can count on the American Cash Flow Association® to support you and your efforts in the cash flow industry." \nhttp://association.americancashflow.com/\n\n"Understanding and Controlling Your Finances \nMonthly Cash Flow Calculator "\nhttp://www.bygpub.com/finance/CashFlowCalc.htm\n\n"Making Cash Flow Forecasts"\nhttp://www.planware.org/cashflow.htm\n\n"Calculating Cash Flow Ratios"\nhttp://www.fool.com/research/2000/features000707.htm
10591
Positive:\n\n- Lower purchase price compaired to single family residence.\n- Usually no exterior upkeep or maintance.\n\nNegatives:\n\n- Monthly assesment to pay for exterior upkeep.\n- Lower appreciation over single family residence.\n- If you factor your total monthly payment including  the monthly assesment, you can buy a higher priced single family residence for about the same monthly payment.\n- Usually no private yard\n- Your assocation makes the rules for complex. (good and bad)
380382
It depends on the type of appraisal.  If the income approach is used the only measurement of square footage you will be using is how much is charged to tenants per square foot.  So either ext. or int. may be used, the main focus is how much income the property recieves.  Look for things called net leasable area or gross leasable area.  In the sales comparison approach they will use other properties to value your property.  One thing they will look at is square footage, whichever measurement they use, ext. or int., they have to use the same measurement on all properties.  In the cost approach they will use both types of measurements because in this approach they are trying to see how much it would cost to replicate the property.  My best advice would be to contact a local appraiser who deals in commercial properties and ask them.  Some of them won't help but after a few calls you'll be able to find someone who will.
6044
To figure your return (ROI) (return on investment) Use the following:\nTotal rental income - expenses = annual cash flow\n\nannual cash flow / downpayment+ fix up costs = Rate of Return on investment.\n\nFor reasons to own investment property clik this link:\n\nhttp://www.garygeer.com/Why_You_Should_Invest/page_542147.html