All Forum Posts by: Alex K.

Wheatie,

If it was a 30 year note, the P&I would be $470/month and it would cash flow. So it seems your rejection is based solely on the loan term length. If I'm planning to own it for the long term, what's wrong with paying it off early?

Thanks for the info Wheatie.

There is an empty lot in the same neighborhood listed at $97k. The property 2 houses away has a much smaller mobile and no garage, listed at $119k. I called the agent and she said lots in that neighborhood with similar mobiles are selling for $105k to $110k with no garage. The comps on zillow back that up.

Your formula for cash flow seems flawed, what if it was a 1 month note and didn't cash flow for one month, then cash flowed big time after that. Your formula would say no way.

I have paid nothing so far but it still seems like a good deal, even if just to flip.

I signed the purchase agreement before finding this site, so the deal is done, but please help me analyze anyway. The property doesn't cashflow but that's because it is a 10 year note at 8% (seller carry).

I am buying a mobile home on land with garage. It needs renovations with me doing the work.

purchase price: $80k
down payment: $16k
renovation materials: $3k
P&I payment: $800
expected rent: $900/month

tax is 600/yr so only $50 month.

Negative cash flow but this is for a long-term investment and the fact it will be paid off in 10 years has to add something to the deal. Is it normal to include only the interest portion of the mortgage payment in the cash flow calculation?

I want better return than the stock market over 20 years.

I see double digit inflation in our futures. If that is the case, it makes sense to buy just about anything durable, especially real estate.

This is my first post here. I've been reading some of the other posts and it brought up some questions.

In one post about subject-to purchases, the poster asked about where the 1098 tax form would be sent to. As I understand it, you can only tax deduct interest payments on your place of residence, not an investment property. So why would it matter where the form is sent if it is useless?

Someone mentioned elsewhere that it is better to buy 3 properties at 30% down than one property with cash because you get a better return on your money that way. They gave the example that $700/month rent on a $100,000 house is only 8.4% return. It seems to me that you are also getting the appreciation of the property which would likely bring the ROI into the double digits. Sounds good to me. I realize the appreciation on 3 properties is better but then you are only getting the appreciation minus the mortgage interest rate. These days the appreciation rate could very easily be less than the mortgage rate, so if your cashflow is small on the 3 properties the ROI could even be negative. Anyway, its something we need to think about.

In my area (Reno, NV) the home prices are quite high and it would be tough to find a deal with cash flow. I am working on my first deal right now. It is a mobile home on land that is $20k under market value that I will rehab and rent for 0 cashflow. The fact that the equity will be increasing and inflation will bring higher rent in the future is why I'm doing it. Is this a bad idea?