All Forum Posts by: Tony Tomasek

It seems to me that you need to contact a good property management co. in the area. They will have the inside track on the avg cap rate in the area.

As far as cash on cash return, it depends on the market. The issue for you is the HOA fee. You are going to be above 50% for sure.

Please keep in mind that there are places that COC can be 20% or even better on a rehab property. You have to have an idea of what the average is in you area.

I would make an offer on the townhome that factors in the HOA. Most people allow at least 10% for maintenance, this could be a bit lower for the townhome. (not 0 though). I am not sure how to evaluate insurance on these deals as I havent owned one. So maybe you will only net 40% as income or so?

Mike is right here on high expenses being a sign that there could be a deal IF you can rectify the problem. Just remember apartments are only measured by income so be sure you arent paying a premium for the privelege of turning it around.

I havent seen any info on what the cap rate is for other sold comps in the same class and area. Just make sure that is in line and you have a plan of action to bring expenses and income in line.

Also look into low flow showerheads, toilets, and fixing any leaky faucets to keep water expenses down.

Tony

Eddie I can say that we supposedly have the second highest tax rate on corp profit in the world. I havent verified that yet though. So those European corps have it better than US ones.

I do not own and have not owned any Section 8 properties, so its fair game for me on that one.

I very simply see that the govt being anything more than a debtholder as being a bit much. Of course no one wanted the results of these mega businesses going under.

As far as the direction and those smarter than you and I and all that, I have to say that if you look backwards a bit, raising taxes in the depression was a direct cause of the downturn. As for looking forward, it doesnt take a major market forecaster to see that we will be in this for a while and it will be a long slow climb back. Once again, we seem to have a short term focus from a politician. No big suprise. Just get ready for some changes to our businesses as a result. We will have to pay the bills as a nation eventually. At that point the government will be forced to go after those with the cash. (no more depreciation expense write offs, 1031 exchange etc.)

In the above post that first paragraph was a quote from an earlier post. Didnt realize that I didnt attribute it.

It is not that I am unconcerned about what Bush did or Clinton for that matter , but we have bigger problems here with the current administration. Lets not be overly concerned with the last 8 to 16 years as we cannot change them.

So we should definitely tax the most productive members of society higher to give more money to the many that refuse to take action to improve their lives.

We should also make energy more expensive to the public right when there will be the rising tide of a commodity crunch.

If he is going to balance the budget, we are quite possibly going to see all sorts of tax laws change. Especially things that have a lot of money attached to them, like 1031 tax exchanges, 401Ks, IRAs etc.

I am not saying ;that it is not important to learn from the past, but lets make sure our rights and livelyhoods are not trampled on in the near future.

My point exactly, even though I am an independant. I just dont see how the republicans remove this socialist that breaks his word from the get go from the White House.

One thing is certain... If the Republicans nominate Palin, I think all is lost.

OK I am still coming to terms with the current administration.(and may not ever) But what do you think will happen here? Do you think it's likely that he will be re-elected? If no, please input on who you think will win the Republican nomination that can win. (please dont say Mit Romney)

I am interested in hearing all thoughts on the matter

One other drawback that you must consider with holding a performing note is that if you are for example holding a note on 40K at 8%, what happens to this income stream if the rate of inflation goes up? Your actual cash value of the note as a lump payment is going to go down. As a retirement strategy with the Fed doubling the monetary supply, you have to realize that a repeat of inflation above the 1970s era levels is likely. At 12% inflation your income stream isnt looking as good as there is no underlying hard asset to protect the principle value.

RE isnt an immediate hedge against inflation, but should catch up with it as incomes eventually rise. In short, I would not use owner financing as a retirement strategy, I would use it to sell a property at close to retail, and then cash out by reselling it ASAP. Save the holding of mortgages for after the inflation.