All Forum Posts by: Ari Hadar

Just pay the $50 for a year subscription. I have gotten to the point where I can jump between realtor.com price estimator and rentometer to filter out 95% of the bad deals that I go through. It is worth the time you save. 

@Aaron Macken Typically, you’ll want to check multiple sources (e.g. Zillow, Rentometer, Facebook Marketplace, property management companies, etc). 

Here’s a blog post with some info on the more common sites and places you can use to help set an accurate rent price:

How to Determine Fair Market Rent

No, unfortunately the spreadsheet won't run properly on a smartphone (the excel app on smartphones is not as robust as excel for windows and Mac). So for it to work properly, you will need to use excel on a computer.

@Ari Hadar

I wouldn't look at it as a situation, in which, one is better than the other. It really comes down to which works better for your strategy. From everything I've heard and read about Cleveland, it does really well for cashflow. So, if you're looking to capture that rental income as your main driver of a property, Cleveland may be the way to go. Especially because it seems, on the whole, you can generally find relatively inexpensive properties that cashflow really well. 

In Columbus, you're probably not finding as many inexpensive properties like that, which also cashflow really well (unless you're direct marketing). You may be paying more, which is going to decrease cashflow. However, Columbus is one of the fastest growing cities in the Midwest. Our diverse economy is bringing in a lot of people and investors. That's causing the market to increase dramatically, which is good for appreciation obviously. As a example, I own a duplex in a neighborhood in South Columbus called Merion Village, which has seen a ton of investment and growth the last handful of years. In the almost three years I've owned it, the property has appreciated almost 14% per year. Which is crazy. Downside (and it's really not in the grand scheme) has been the increase in property tax each year because the area is improving, which has raised the mortgage, which has decreased cashflow. But, I have an asset that is much more valuable than when I purchased. 

So, one isn't necessarily better than the other. Cleveland's strength is great cashflow, probably better than Columbus on the whole. If that's your goal, then put your money there. But, Columbus, while having less cashflow, has higher appreciation potential. It's a longer term game here. Different strokes for different folks! 

@Ari Hadar I meant that when you read his story you can tell that he found a great person to teach him about real estate in his local market.

In general, I think people put too much effort into finding some magical mentor that will teach them everything about real estate. In real life, if you put in the effort and show up to meetings you will meet several people. Instead of having 1 mentor you will have 5-10 people that will each teach you something. You’ll be able to put this all together.

@Ari Hadar

For the 50%rule it’s a quick way to analyze a deal. Included are all expenses for the building. Property management and the loan payment are not included because that is your decision to get those things. To make it quicker if you know you are going to have a property manager charge you 10%, or whatever, you add that to the 50%then minus it from the gross income. A t-12 is a trailing 12. So that’s the actual p&l for the year.

@Sam G. 

Median Home Price Growth by City:  https://www.zillow.com/researc...

Job Growth by State: https://worldpopulationreview....

Getting job growth at a more granular level is likely something you would have to dig into the county or city sites for data.

Best of luck on your journey! 

@Michael Davido 1st you didn’t have the mortgage included in your original post so that’s why I listed what it was based on your estimates.

$1,650

- $82.50 vacancy 5%

- $82.50 cap ex 5%

- $82.50 repair 5%

- $323.33 taxes

- $83.33 insurance

- $165 PM 10%

- $531.64 loan

$299.20/mo which is the same number you got. I didn’t use your numbers I look at things with the 50% rule because I believe that’s conservative. If I am happy with that return I will take the deal. I use the 50% rule to quickly look over deals and then I will do a more specific break down after analyzing a t-12. So to answer your question I do the 50% rule and I run the actuals.

Question for the group:

Do any of you consistently believe in and use any “rules of thumb” when evaluating a property? Such as... the 2% rule, 1% rule, 50% rule... why?

@Jamie Oliver Congrats on getting started! The first step is physically the easiest but mentally it is the hardest. Congrats on getting past that. I also think you found your mentor. Stay in touch with that agent!!!!!