All Forum Posts by: Andrew Reid

Also, what is a good maintenance and repair %?

@John Leavelle

Thanks for the quick reply. I am doing the Rental Property calculator now. I am using a 5% vacancy rate (high-conservative?) but do not know a percentage for CapEx savings. $10%?

I'm currently a 2-family rental property owner and would like resources and experiences on how one has financed or would finance a 10-family property. Links and advice greatly appreciated. 

I am considering purchasing a 4-family property, living in a unit and refinance to remove PMI after a year or two.

After the following expenses, 1) Property Tax 2) PMI 3) Hazard Insurance, it would cashflow at about $880 per month. After calculating heat, sewer, water and common area electric, cashflow would be approx. $530 per month.

Does this seem like good cash flow? Its better than my first property ha-ha. This would be my second. 

Which calculator would allow me to build in FHA based loan and refinance? BURRR?

I also posted this on Reddit Personal Finance subreddit

I would like to get feedback on my current situation and trying to make a final decision. I have money in a 401k from a previous job and also a rental property that is not cashing flowing at all. I was living in it but no longer doing so and therefore I need it to cash flow. I cannot sell it now since I would incur a lose. It is a 2-family.

Below are two scenarios, feel free to check my math. I believe it makes more sense to invest the dollars in the rental property and start putting 6-10% into my new company 401k. My company matches at 6%.

TL-DR: Scenario 1 results in $593,490.00 and Scenario 2 results in $692,791 after 32 years. The latter assumes sale at 32nd year. If not sold, annual cash flow is approximately $24,536 after expenses. I should note, the cash flow swing on the rental property is $662.30 this year.

Scenario 1 - Roll over in 401k or leave in existing 401k (either way I do not pay fees according to both companies)

401k Balance $49,822

Link: http://www.bankrate.com/calculators/retirement/401...

Assumptions

Annual Rate of Return - 8.05% - this is the annualized rate of return since initial purchase

Current Age 33

Retirement Age 65

New Annual Salary $112,500

Percent to contribute - 10%

Retirement Balance (before Taxes)

$3,947,497 with rollover

$3,354,007 without roll-over

Delta

$3,947,497 - $3,354,007 = $593,490.00

I believe this is the number to compare against.

Scenario 2 - Withdrawal and pay 20% tax and 10% penalty on 2017 return and invest in rental property

Link: http://www.calculator.net/rental-property-calculat...

Current 30 year FHA mortgage @ 4.75% with PMI. Withdraw and pay mortgage down to 78/22 LTV to remove PMI and invest the rest to gain higher rental income. Checked with Realtor and can achieve said rents after investment.

22.5-year @ 4.75% (Result after one time payment on mortgage - via loan servicer amortization schedule calculator)

One-Time Cost (invest rental units) - $12,300

Purchase Price (Current Balance) - $241,769.13

Down Payment (Amount to Pay Down to 78/22 LTV) - 11.6016176% of above Purchase Price

Assumptions

Property Tax & Annual Increase: $9050 & 3%

Insurance & Annual Increase: $1,110 & 3%

Maintenance & Annual Increase: $1000 & 3%

Monthly Rent & Annual Increase (Conservative?): 2%

Vacancy Rate: 5%

Management Fee (self managed): 0%

Value Appreciation (conservative?): 2% per year

Holding Length: 32 years (until age 65)

Sell Cost: 9% (Closing Cost, Fees, agent fees, etc.)

Based on calculator

IRR per year: 12.92%

Return on Cash Invested Total Years: 1716.99%

Cap Rate: 12.41%

Total Cash Flow @ 32years (if sold): $692,791

So I can disqualify tenants that have collections? If so, I will do so as I am not confident in their ability to pay the rent. 

Although, they have been providing their share of the rent to the original lease signers for on time payment. I just don't want to violate fair housing laws in the future if I accept and don't accept on a consistent basis. 

How does one get access to the complete CRs? I was using transunion's smart move service. 

Hi Everyone, 

Property Location: Albany, NY 

Last week I sent a rental application to 3 tenants. One of the tenants is a new applicant as their old roommates are moving out. They were the ones that originally qualified for the entire rent but their roommates were required to be on the list so we all knew who was occupying the apartment. 

The 3 tenants finished the applications and turns out to have 5.4x the rent (total annual income / total annual rent). 

Smart Move usually provides a recommendation but now it states "Not Enough Information". One of the things it states is the addresses do not match. Well, this is because they were living at the apartment and didn't have anything in their names. 

One of the applicants has 8 collections and another has 1 collection. I feel like this may be a problem They have no debts on the credit reports. 

No criminal history and not evictions on all 3. 

How should have handle this? 2 are living in the apartment now and their roommate about to move out at the end of the month. 

Any help would be greatly appreciated. 

Can someone share their tenant qualification form/checklist?

 Where can I get a draft or template of a tenant selection criteria form? Do you mind sharing?