Questions from a new investor..... :-/

[Carlos Quiros]

Hello All-

New to investing and had a few questions for those seasoned investors. My wife and I are looking at the mid-west to start investing (Ohio, Wisconsin, Indiana, Pennsylvania or Kentucky) My question are in the models I am running I am losing money on deals or barely breaking even. Should I expect to cash flow SOMETHING or just be happy with a breakeven/small lose and expect property appreciation to help later as a buy and hold.

For those of you that are already investing in these markets are there some your prefer over others?

What percentages are you seasoned investors assigning in your models for

• Insurance (I know that I can look this up but is there a baseline number to get an idea)
• Maintenance %age
• Repairs %age
• Cap ex %age
• Management Fees %age
• Who typically pays for (Gas, Electricity, Water, Sewage/garbage)

Should I avoid properties where I pay water as it would eat into my profits?

For those of you that are already investing in these markets are there some you prefer over others?

There’s so much to unfold and it’s definitely overwhelming but I thought I would ask those who have been in my shoes before. I know it’s a lot but it can be done since there are already so many successful investors here that show me all I need to do is keep going and ask questions.

Thank you in advance to anybody who takes time out of their already busy day to help a noobie

Carlos

[Gloria N Gear]

I am in indianapolis, here are the numbers I use.

Insurance 1% -- most of my properties are $80-$120 a month
Maintenace 5%
Repairs/Capex - 5% (but I try to front load my properties and take care of major items up front - like roof, HVAC, sewer, etc.)
Management - 10% (typical for Indy area property managers, some are less but you get what you pay for)
Utilities - my tenants pay for everything (including lawn care and snow removal)  I have one property that has shared water/sewer for 2 units - I charge each tenant an extra $40 a month in addition to their rent to cover that.

(FYI - i am mostly single family, but have one duplex) be happy to chat more if you have more questions.