All Forum Posts by: Aaron F.

3 years for a Down payment. Either he has very little income or I just don’t think he’s taking it seriously. Have him read mr money mustache for advice on how to save half his income by getting serious about reducing expenses. 

Your cash flow numbers exclude major expenses like vacancy, repairs, and cap ex. If estimates for those are added in, the return on equity for this property is much lower than you think. If this is an appreciation play, ok, but if you want cash flow this one is not doing it. 

Ben Leybovich has written some helpful material on running accurate numbers for expenses. 

You lose that fear by being able to afford it sitting vacant for months. The bigger fear should be picking the wrong tenant just to fill the vacancy. Make sure you have good reserves and margins on a property, especially with how things are right now. 

A number of my tenants prefer to pay cash. They go into the branch of my bank where I hold my business account and they deposit it there directly. There are no fees or hassles. 

The property is is MA. I would be “overthinking “ any potential tenant from what I’ve heard of that state. She’s already shown she’s ok with not honoring a debt. 

 Thank you for this. The usual advice is raise the rent and include utilities, but then you have to market a rent that looks too high. With your strategy you list at market rent and then explain fixed utility costs. 

Do you notice less waste of utilities even though the cost is fixed? Have you run into any challenges with this strategy?

Mini splits use a heat pump and therefore lose effectiveness in extreme cold. You will have some pretty cold nights in Madison and will probably need a backup heat source in that case. 

Is the duplex an over/under? If so, keeping the forced air for downstairs may leak enough heat up to supplement a mini split in the upstairs unit. Otherwise you’re looking at electric baseboard backup. 

There are some great responses in this thread already, but I can add one small detail just for helping analyze future deals. 

That tax rate amounts to less than 1% on purchase price. I don’t know the rates for investment in Philly, but I am guessing higher than 1%. I would be prepared, then, in my calculations, that at reassessment the new purchase prices may be taken into consideration and taxes could potentially double. 

You are excited to close your first deal and your excitement is about to push you to make a bad decision and buy a property 2000 miles away with a serious issue that you are not educated on.

What you are looking at is a high clay backfill and hollow core block that was not filled with rebar and grout. The clay expands and contacts with moisture changes and settles a little each time, pushing in the wall. The solution has to include fixing the source of the movement, and that means excavating the exterior, waterproofing, and backfilling with gravel which does not expand or contract. 

The issue is there are lots of contractors who will take your 12k and put up I beams and you will think you are good. They will also sell you an interior sump pump for another 10k when the water is obviously entering from the exterior soil. We have an issue with competence and integrity when it come to basement/water contractors. 

There will be other deals. I would keep looking. 

I think this depends on the price range of your property. I buy older homes with very dated finishes. For my market, new vinyl floors in kitchens and baths, new laminate countertops, new plumbing fixtures, new light fixtures, new switches and receptacles (white), new paint, and either painting or replacing kitchen cabinets give a very worthwhile increase on rent. They also make a place look exceptional vs most competition in my area.