All Forum Posts by: Abhishek Ramanan

@Jay Jasunas doesn't it only make sense to put more money down initially if you believe that you won't be able to compound your money greater than the interest rate on your loan?

$2600 seems about average for the area given the size of the TH. This will likely increase to $2900-$3000 in a couple of years. That put's me at 16.98 price to rent ratio initially, which is lower than average for Northern Virginia.

@Russell Brazil yes this is 20% down, with .75 points. I've tried to negotiate the price down (base price is at 525k) but to no avail. This is a townhome, but even discounting for vacancy we're at -$470 CF per month...which maybe isn't as bad and could yield positive in a couple of years after some rent increase? Would you be willing to pay that much if the appreciation possibility was substantial?

@Russell Brazil Unfortunately my calculations do say negative cash on cash. I can display them here.

$2,600 a month in rent for the first year, this is likely to increase with metro expansion and new development, but seems to be the average about now. Property tax & HOA are pretty high, Loudoun County charges 1.285% per $100 in tax. I've even removed CapEX (new property, minimal required), and property management, but still arriving at a negative CF. Interest rate at 4.8% for non-conventional loan seems about right. Do you think there's something I'm missing?

Hello, first time posting after months of podcasts and reading thru forums. Myself and another friend of mine are really looking into investing in a high COL area (Ashburn VA). Lots of appreciation potential, new development & properties, new metro connecting from Washington DC. We are both going to be out of state investors, but grew up in Northern Virginia so we know the area very well.

A new property (3BR, 3.5BA, 4 floor) we are analyzing passes all the check marks for investing viability, except for financial from the way I look at it. Using the rental property calculator, Cash on Cash ROI is -7% for the first year, and doesn't become positive till year 11, after we've had to invest an additional 46.2k to balance each month. However, due to the appreciation play, we can see this increasing 3.5-4% over that time, including maybe 5-7% each of the first 3 years. This makes our overall profit look pretty decent, with a 12% return.

Question I have is, at what point do you value appreciation over cash flow? My friend is pretty interested in the property, especially due to its growth potential, but I'm wary of the amount of additional cash required. Appreciation is also a projection that could be off, whereas a mortgage payment, taxes, HOA, & vacancy rates are easier to predict.