All Forum Posts by: Andrew Russell

@Theresa Harris - thank you,

In the market I'm looking in, there are homes in around 100k which could become rentals without too significant rehab. Even some smaller SFH in the 70k-80k range. For my situation, 35% doesnt break me even with some rehab (not substantial). I'd still be able to pursue a second property afterwards.

Andrew

Hey guys!

I'm a newbie out of West Michigan, been listening to podcasts, watching webinars & reading the blogs and forums trying to learn as much as possible as I begin my investing career.

I'll introduce myself & my situation in the appropriate forum, but I do have a question for the buy & hold crowd-

What % of the purchase price do you target on for your downpayment when analyzing deals for cashflow? I know other metrics like ROI and CoCR need to be accounted for too, but obviously the higher the downpayment, the higher the cashflow. I see Brandon Turner uses 20%, which is the general minimum for bank financing, how about the rest of you?

Would you drop 25, 30 or even 40% to get a property cashflowing where you wanted it, in that $100-200 per unit range if the other metrics worked out?

I'll add, I'm still working on getting my first deal, I don't want to get stuck in "analysis paralysis" mode, but I also dont want to rush in and make any huge mistakes either. I'm sure I'll learn a ton from my first deal when it is said and done. I'm still very curious to know how much you guys flex on that downpayment.

Thanks!

Andrew

@Account Closed

The layout is awful, the four of them are all diagonal, near the road, so they are blocking the road frontage.  Not well thought out.  I don’t know what it would take/cost to move them on the property, but at least one would need to move to gain more access to the rest of the land.  I will have to investigate.  Great suggestion, thank you!

Price is $60k.

Andrew

@Account Closed

Average lot rent around here is between 300 & 400.  The property itself is under 1.5 acres, so there is not significant room to expand without acquiring the surrounding properties.

The current $1,900 would bring in around $340 CF, this accounts for 20% down conventional, with 40% set aside for repairs, CapEx, management & vacancy.

This would be my first investment, so I appreciate the suggestions.  I will have to talk with the current owner to attempt to understand roughly what the repairs have been & then I’d be able to understand if the reduction in income would offset the reduce maintenance cost moving to tenant owned.

Thanks,

Andrew

Hi Richard,

The homes are “park own”, though it is less of a proper park and more of a piece of land with 4 homes on it.  The combined rent is $1,900.  The tenants are all supposedly long term.  I am in Michigan.

My primary goal is to buy/hold to generate cash flow. The property is located close enough for me to maintain, so I may be able to increase the cash flow even more by saving that 10%.

Hello,

I have an opportunity to purchase a piece of land that has four mobile homes on it, all single wide.  Each unit is metered & the tenants pay electricity, heat/gas & trash collection.  Owner pays water, which is sourced from a well.

Performing the analysis, based on the list price, the cash flow is $340 /mo. This accounts for 10% each in vacancy, CapEx, management & repairs. I haven't toured the property yet to understand what repairs may be needed.

My question to you guys - am I able to perform my analysis the same way on a 4 unit mobile home property as I would a SFH or a MFH, or will I be missing a critical piece of information. I am effectively just using the rental property calculator.

This would be my first investment, I’ve been scouting and analyzing properties for several months, this is the first in my area that actually comes out positive without having to reduce the purchase price significantly.  I really want to get my feet wet, but I am unsure if this type of property is a good one for a first time investor.

I appreciate your feedback,

Andrew