All Forum Posts by: Bill B.

@David Van

Thanks David, old post, but it lets you see how long the “next crash is coming” people have been around. And now Vegas is up another 13% since then. 

Now a 25% crash puts us back to 2017 prices instead of 2016. Maybe we can revisit in 12 months and a 25% crash will put us back to the prices We were warned us were too high.

Must be impressive apartments. If your going to pay $20k/month in interest plus utilities, Managment fees, repairs and maintenance and still generate $6ok/mo net income on 38 units? $2,800/mo rent each? Maybe more?

If your plans involve $720k/year net income on $2.1million with the interest you should be able to find some takers for a 3 year loan. Especially since it will sky rocket to almost a million a year net income on 38 units after the loan is paid off. Again, huge rent, ocean front?

Maybe find out if the 3 acres has any value and find a separate cash buyer for it. And bang, there’s your downpayment. 

This is what I saw for free. Didn’t see any way to pay for more info 

Crimemapping.com

If you think home inspections cost more than $500, you’re probably new enough that you should get one, but don’t spend more than $500, maybe closer to $350 unless they are testing for radon as well. 

I don’t bother in Vegas where houses are relatively new, good weather,  and don’t have basements. I do in MN with older houses and basements, and freeze/thaw weather. 

Nope. Use the magnifier search tool and you’ll find others have already done that. Don’t forget to deduct the 6-12% in fees. And be prepared for any repairs. But I’ve had reasonable offers form them though a few have mentioned 25% less than market offers. 

For two it seems plenty high if not too high. For me at least. unless you anticipate roof/ac/something over $5k soon, I would use the cap ex of one property unless you need the rental income to pay the mortgages. 

That would leave you $5k plus 2 x rent payments to pay for any repair. 

I have 12 local properties and here’s how I do it.

I have the next two months of mortgage payments already taken out of my checking account and keep zero cap ex reserves. That means if I had to use all the rent from all 12 properties, for two months, I’d still be ok. The plan would be to put the expense on a Credit card and that would slide me past the next rent due date. 

Weather or house style may play in to your decision. Here we have stucco siding, tile roofs and almost no weather related damage. In the last 20 years I’ve bought 4 air conditioners (2x per property, at $2,000 each) and about 24 water heaters (at $1,000 each), the rest are minor, maybe a couple dozen kitchen appliances and another dozen laundry units. I’ve never had a repair that’s even close to a full months rent from all of the properties. So having 2 months rent is overkill, but it makes me feel better. 

@Brian Larson

Yes. Just making a point. I was going to say New York But I don’t know the market. My point would be anything way under the average rental for a market. Mostly that the average cost has nothing to do with rent. 

My in-laws have a Farm with a nice 2000sf house in a town of 1500. They MIGHT, be able to get $500/mo rent. The rental population might be 100 people, might be less. And they’re7 miles from that small town. 

I think you should rephrase the question as how big a mortgage?

Since obviously a paid off million dollar house will cash flow. 

After that you have to consider property taxes, income taxes, weather (both damage and mitigation), age of the house, HOA fees, construction (stucco vs wood, tile roof versus shingles), city utilities versus septic/well, location,location, and oh yeah,

Location. :-) 

($500k House in San Jose ca or on the farm in the Midwest.)

Weird. There’s another thread going where the seller netted 1% less than his arv net without doing any repairs from offerpad. 

In my test with them in Las Vegas a year ago their offer was my value (high end of Zillow) minus 12%. (6% commission and 6% “market adjustment”) You guys say you’re getting offers 30% below fmv now? maybe they were getting too many accepted?