All Forum Posts by: Bob McIntosh

Well to be 100% honest, I have no idea what section 8 means. I have seen the term thrown around on this board, but I have not researched it at all.

In general for the investment area the rents would be around the following:

1x1 - $325 per month
2x2 - $450 per month
3x3 - $600 per month
1/2 Duplex (2x2 with basement) - $750 per month

Anything more than that and you are into single family houses at which point nobody really rents because its economically cheaper to buy.

This is assuming a "decent" apartment, in generally good condition... i.e. the middle of the road apartments.

All rents are in line with rents for the area (as per my knowledge, and research of current rents available, and some people i know live in that area as well). All leases have been confirmed, I have a copy of all leases, the one expiring the soonest is in 7 months. 2 units are metered together, the other two are separate. the 2 together state in the lease that they split it 50/50 each month.

PI is listed in the details for the year (divide by 12 for monthly)

Thats good to know!

:goofy:

So I have found a property, in a decent middle class neighborhood, the details are as follows:

[list]Property Price: $140,000 (asking price, can negotiate down but for analysis purposes keeping it here)

# of Units: 4

Total Yearly Rent: $25,800

Expenses (assuming 50% rule): $12,900

Down Payment: $14,000

PI: $7,664

Property Management: $1,290 (its about 6 hours away so no way for me to effectively manage it myself)

Cash Flow: positive $2,656 (yearly)[/list:u]

Seems to be a good deal to me... whats your guy's opinion, am I forgetting anything?

After some careful consideration, I think that I may look at investing in a different area, at least until I can build up enough cash to look at something more local.

I was thinking about looking back in my hometown since the prices are dramatically cheaper, I know the area well (spent 18 years of my life there), and I know the people...

I think this will also give me more of a chance to get my feet wet, get some knowledge, and then allow me to scale it upwards once I have the additional income, and more knowledge...

Thank god for the internet and sites like BiggerPockets

W00t! :groovy:

Good, cause if it wasn't I was going to ask who you guys are holding guns to get positive cash flow :P

Well if you are listing the REO's direcly, as in they are coming directly from your bank/financial institution, then check out a local REIA, there are many investors out there willing to pay you for a list that is accurate and timely. There are ways to get all of the information for free however it is time consuming and most investors don't want to waste their time trying to do that.

So since I have decided to get into REI, the one thing I have noticed, and the one thing that has held me back to an extent is price fear. In my particular area there is nothing even worth looking at for less than $400,000, and most of what is truly profitable is more in the $800,000 - $1,000,000 range.

This is a lot of money for a first time REI to think about spending, Not to mention that the down payments on these properties are huge... Has anyone dealt with this, and if so what was your motivation or how did you overcome it?

Thanks!

Sorry if this was posted earlier, but I didn't see it and wanted to ask...

Does this 50% rule include vacancy as well, or should that be calculated as an additional expense?

Thanks!