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Everybody Should Buy A Quadruplex At These Prices

If you want a smart and safe real estate investment in Tallahassee, you should buy a quadruplex.

I was talking to a long-time friend last night about the crazy-good returns that are now available in the Tallahassee real estate market, and it made me think it would make a great blog post for the weekend. Everybody who has the means should buy a quadruplex in Tallahassee right now, and the analysis below explains why.

Why You Should Buy A Quadruplex In Tallahassee

The real estate market is in turmoil, with values dropping more than 30% in most neighborhoods in Tallahassee. It is not a good time to sell an investment property, but it sure is a great time to add the right one to your portfolio.

I was speaking with a lender the other day, and he told me a well qualified investor can borrow money at 4% (with a 25% down payment). At 4%, you can really get dynamite returns.

Buy A QuadruplexSo how do you optimize the benefits of this great investment loan? Simple, you buy a quadruplex.

You can buy a quadruplex (four unit residential dwelling) and finance it with this great loan product. And here is my simplified view on what you should expect from your long-term investment:

If you buy a quadruplex and own it for ten or more years, I believe you will see historically normal appreciation from current values. By leveraging your purchase (only using a 25% down payment), the long-term appreciation (see numbers above left) will represent roughly a 13% return on investment.

Additionally, you can expect another 10% from your cash flow, and 5%+ from your principal reduction (the amount of your mortgage payment reducing the balance owed). All of these together show a first year return of 27%, which means you should anticipate better than 30% ROI when you buy a quadruplex and hold it until we reach a sellers market.

How To Buy A Quadruplex In Tallahassee

Of course, you cannot simply buy just any four unit building and get this return. The key is to buy at the right price and in an area that has a strong chance of sustaining great tenants for many years.

Nobody knows or analyzes the Tallahassee real estate market better than we do at Joe Manausa Real Estate, so if you think you would like to buy a quadruplex, just drop me a note and we can schedule a time to review the exciting opportunities for real estate investors today.


*Joe Manausa Real Estate is a brokerage company headquartered in Tallahassee, Florida. Its unique business model provides specialists to both home sellers and home buyers, and the results speak for themselves. JMRE has significantly more 5-star reviews on google than any other local competitor. Joe Manausa Real Estate is a leader in internet marketing and utilizes search engine optimization, email marketing, social media and data analytics to get their clients’ home sold faster and for more money than any other Tallahassee brokerage firm. For more information, visit www.manausa.com or call us at (850) 366-8917.

Discussion

#1 By MJ at 7/11/2017 3:47 AM

Hi, I am actually looking for a Quad but have not seen anything attractive enough yet on the MLS. Do you have any listings or know of any distressed opportunities, we are ready to buy and have the money to do it. Please call me if you have any information. Thank you!

#2 By Devin Jackson at 7/11/2017 3:47 AM

Joe,

I've agreed with this article before it was even written! I have been running numbers on multi-family dwellings in Tallahassee for some time now. My question is, can you please break down the acronyms in your calculations?

PGI
less v/c
EGI
less OE
etc., etc.

#3 By Joe Manausa, MBA at 7/11/2017 3:47 AM

Here we go Devin:

PGI - Potential Gross Income

v/c - Vacancy and collection losses

EGI - Efffective Gross Income

OE - Operating Expenses

NOI - Net Operating Income

ADS - Annual Debt Service

CFBT - Cash Flow Before Taxes

#4 By Joe Manausa, MBA at 7/11/2017 3:47 AM

MJ, We've made the call and left you a message.

#5 By Devin Jackson at 7/11/2017 3:47 AM

Thank you Joe. I don't like the word "steal", so I'll just say "borrow" your technique for calculating ROI and incorporate them into my investment prop spreadsheet. I'll soon be MJ's competition once I learn all the ins and outs.
Thanks again!

#6 By Joe Manausa, MBA at 7/11/2017 3:47 AM

I hope it serves you well Devin.

#7 By Joe Manausa, MBA at 7/11/2017 3:47 AM

Devin/All: If you want more information on the analysis technique that I use, I wrote about it in 2008 ==> The Real Estate Stack

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