All Forum Posts by: Aaron Junck

Thanks Jon Holdman and Huggy Baird

Thanks William Bannister I was hoping to come in closer to the 35-40% mark for Expenses on a new construction project I am in the process of putting together. And for now I was planning on hiring my Father to do the Property Management on this property so it gives him something to do :) So for the time being I wont have to pay the higher of the percentages figured I will however budget them in since I know there will be a time he wont care to do it anymore.

oops typo .. 1/3 of the 50% aka 16.5%

Jon Holdman Thanks.

So your saying in your area ballpark of 16.5% of that 50% is figured for Property Management? Woowzers..! I currently do it myself on my 1 rental I have and have never priced it out but am glad to know what I need to roughly budget when it comes time to hire it out.

Thanks Huggy Baird thats what I was wondering and you answered it. I was wondering if the property taxes would chew up the initial cost savings of the lack of potential repairs.

As far as the "50% Rule" goes.

When you evaluate a property and you say 50% of the monthly gross rents should be figured for expenses prior to servicing any debt, does this vary much if you are going with new construction or would you still figure 50%..

Correct me if I am wrong or ignorant, however I see as far as repairs go there shouldn't be much at all for quite some time due to the fact that is new.. new appliances, furnace, AC, roof,paint..etc. I realize that you still need to budget for these expenses, bc there will come a time that you will have to repair something. I am just curious since this isnt a 15-20 yr old property that may need a new roof in 5 years or a furnace etc..

Also this 50% rule would include property management,right? which would be ballpark of 8%???

Can someone breakdown this 50% Rule for me maybe?
Thanks

Thanks Mike H. everything you stated is what I hoped to do. I just wanted to talk to everyone on here to see if anyone has done anything like this already. I want to be able to talk to the PM and tell them I expect to tie up their money for 1 year or 2 years etc. I just wanted to know what was a realistic timeframe to be sure to get conventional financing lined up and approved. So if I am able to get it built in 6 months or less and then get the units rented prior to the finish date (have them move in when finished of course) and then show full occupancy for 6 months, my plan was to get conventional financing to get the PM paid back and have a LTV around 75%.
I only have one other Rental in my personal name currently so yes I am under the 5 mark.

Thanks Steven Hamilton II Travis Sperr Charles Anderson I appreciate all your help!

Thanks Travis Sperr I don't expect to get rich in just a few years off of real estate, however my thinking is if I am able to live off of my construction business income and every year build a property, I am entertaining the idea of 4 plexes, without taking out any of the equity in the properties and then also use the monthly cashflow to use as reserves and also to keep moving forward with more properties that in 5 years I would have 250k . I dont think I would be getting any huge apartment complex but possibly something around the million dollar price range.

Thanks Charles Anderson I will start networking for some investors :)