All Forum Posts by: Alexandre Marques dos Santos

@Garrett Cannizzo

I just had a similar situation. My tenant ( in my case a 5 yr tenant) asked if i would sell them. I put market price and enjoyed a no commission deal.

I got the downpayment money and financed them myself.

I can buy other properties giving a better return, in a moment i would have to increase capex on that one...

@Jennifer Torino

Dont get into this deal. Numbers just dont make any sense...

The rehab cost looks to be extremely high. Are you building a super nice, top quality 3 bedrooms? Is the rent reflecting that? Anyway you dont do all the work, is it cosmetic or needed?

All said, this is a big NO DEAL for me.

@Alberto Nikodimov

Excellent question. I will try to put a background so its easier to understand my overall view.

I would start saying i believe 50/50 in profits would be fair ( you look for property, rehab, etc, he pits 90% of money). But having investing in holding, that might be not fair. I believe the best scenario is to have average if 30% profit in the property. So for the 100 you guys put ( 90-10), you end up with 130.

If thats the case, imagine you take the 10 back, plus 15 of the profit. You would get 25.

On the other hand, he put 90 and end up with 105.

If you believe in what i am putting, your partnership should end as 105/130 for him and 25/130 for you.

If you believe you will only improve price by 20%, you would have 20/120 and he 100/120.

In both cases, 20% seems to be fair value of the partnership.

Good luck

@Lloyd Son

I have 7 properties and fully insure those. Over last 7 years i could have saved 49 k if i didnt. But if something did go wrong i would lose 350k+ to break even it would take about 45 yeas. What are the odds nothing will happen in 45 years? You never know...

So the real question is not if you should have insurance or not. Goes in how to save some, having property insured?

So being a rental unit i decided to have the least in personal property. I dont have jewelry and i put deductible a bit higher ( i am ensuring a worst case scenario, so up to 5% of the property value i accept as my risk).

Having multiples properties i decided to lower liability to 100 k per property and did an umbrella of 1 mio. The odds i have multiple lawsuits is very low. Total save was about 1k per year with umbrella and another 1 k with deductible and jewelry.

Good luck

@Julie J.

Not necessarily. Using my own experience i cant say that. The good thing on new home is capex is very small, so easier to calculate accurately cash flow.

What drives appreciation is general market, the amount of new constructions coming to market and general demand x supply factors.

@Kishun Barker

Cash is king... so you have power to close quickly. Use that to get discounts on “need to sell” properties. Year end is great as builders need to get rid of inventories... only define as quick as you can if you gonna hold it in a vehicle or under your name to avoid transferring later. If property has association, you might face transfer fees later and could add some undesirable expenses...

@Jack B.

Well seems you cant find deals and you cant ask properly questions, and in top of all, you are completely rude. I am sorry i wasted MY Time trying to help someone who clearly do not deserve any help.

@Kyle Fairbanks

I encourage you to read about recasting. Theres a forum here in BP that covers this topic and would be the best choice if you got an extra cash to put on the property. The guy explained very detailed what is.

Good luck

@Kyle Hern

You nailed it. People “love” leverage and don’t even rationalize what others post. If you have some extra cash sitting in the bank, you cant always buy another house. Several reasons: 1) amount of income x debt is too low. 2) Expenses are too high, 3) you feel market is not great to buy, 4) you just dont want to add... or theres just bot a good opportunity in your horizon

For Any reason you can decide that the beat strategy for you is to have a better cash flow.

I invested in real estate ( thanks for long years working in financial markets) paying cash for all the houses i bought. Cause of that i got always deep discounts. This idea is criticized by many here in BP, but i do not care. Those believe i am doing a disservice and dont even think about my arguments. I had lots of cash receiving 3% at the bank and mortgage was 4.5% at the time. Plus closing costs and less deep discounts, was equivalent to me as it was better paying in cash.

The idea given here was very nice for those who want to set aside some savings, having some return. I know some people that need to put the money to work, otherwise it will end up spending it. This is just another reason to use the tool.

Also, as mentioned, as installments drops you can more easily get another loan ( income x expense ratio will improve), or just be able to refinance with more cash out. That will be available to you.

Antway, get the idea and use if you feel its worthy for you

Good luck

@Jenning Yu

The difference is risk taking. When you recast, you are investing on your asset. Monthly payments will drop and cash flow will increase. You will quickly save more monthly. Putting the money in another fund will not give you more cash flow, will increase your risk ( you dont control your asset).

Comparing this option is not fair, because the product is different, risk is different, the results are different.

Not saying its a bad option, just that you are accomplishing something different from what the author tried to.

By the way, fund giving regular 10% without risk is a big red flag for me... just saying!! 😀