All Forum Posts by: Bogdan Cirlig

ok, on paper it looks good, see attached calculations I made. I put in 1000 property taxes and 600 insurance. I don't know your real numbers there. I am concerned about C class asset and the vacancy (I planned for 15% which is usually low for C class). If you PM me a property address I can give you a much better insight into it.

As for structure, buy the property and rent it back to her. Sound and clean.

BP has a very thorough one as well. Thing is, none has the needed data in it, it's pretty much BYOD (bring-your-own-data). I personally don't like to spend more than 1 minute to analyze any given deal numbers hence I use tools that bring data as well (rental, vacancies, property market value, tax info, etc). I need a fast way to scan fast through several deals and keep those worth looking further into. 

I know my target Cash-on-Cash and I start from there. What I do is plug in an address and I see a C-o-C out, if that matches my minimum, it's a keeper to look more into.

Generally true, 1.25%. zillow has property tax history by year. Faster than navigating county assessor's office. They get that from same county office too.

Definitely not looking like a great deal. Also what asset class is it? Numbers may pan out, but it's not a desirable area etc etc. Also look at the household income for that area, compare with the rent estimate for your property, to make sure you don't have the most expensive rental on the block or the cheapest either. Also consider the Cash-on-cash, are you making more than 10%, if not, better get in the hard money lending business so to speak :). From what you said you have a very marginal +CF. that means if you have any CapEx or similar you'll jump into negative.

In addition, check pricing trend for the property value. Don't automatically assume all areas are skyrocketing. Consider the reason why the guy wants to sell also. Vacancy 13% is on the higher edge, not alarming but generally you want no more than 8%. Renter density looks nice (I prefer under 25%, again matter of taste and subjectivity).

Since you already used the website :) (thanks for that), the ROI tab shows clearly the breakdown of your ROI sources, you can bank on appreciation ROI on CF ROI etc. Generally you want the deal to CF with 20% down. Don't get tricked into thinking that it's ok to CF with 40% down :). Any deal will CF at a point if you pour enough down, but that's a mistake to think so.

Also, check the schools, that makes an area desirable. Check the type of people and how they get to their jobs. Blue collars most likely want to live near transportation hubs, white collars prefer away, quiet area etc. There are many factors to making the right purchase other than the +CF or a fat Cash ROI.

Bottom line, it appears your deal is struggling on the CF to start with, so my $0.02, move on. I don't think it will be a great deal even if you pay $140k for it. Matter of personal taste, to me, I quickly look at 1% rent to purchase price, if that doesn't pass, I'm not even considering it. Your deal should rent for $1,400/mo at 140k purchase to make it remotely interesting to me.

Assuming you have completed reference check and they're a solid business, give them just enough cash to buy the materials (at cost) or up to 50%, pay for labor upon delivery if it's a short job less than 1 mo, or pay for labor in milestones for a longer one. 

Or, if it's a longer project split it in manageable milestones when you front the $$ for material cost and pay for labor upon milestone accomplishment. 

Realtor does cost you if they find a tenant. Usually 1 mo worth of rent split between the 2 brokers assuming there's a buyer's agent involved too. If you are hands off, then hire a realtor or a PM which will do same thing. Most of the time the listing agent is NOT present for every showing, they give the lockbox code out to the other agent, unless the listing agent has an open house.

Most likely that's the way it will go anyway. I can't see a listing agent showing up every 1 hour to show the property to someone else.

Tenant does NOT pay a dime to find the place, it's you who does.

You can definitely request to have final approval on pre-screened app from realtor.

If you want to save 1 mo of rent and you are close to your property, list it on zillow and craigs and batch up the showings in the evening every day. Works wonders. don't dismiss any advertising channel, they all yield good and bad prospects. You just screen them. 

Good luck!

The AirBNB has definitely produced a very interesting effect to increase the actual cashflow you get from your rental. Now, definitely, you have to pair up your property location with a tourist attraction/destination.

I live in San Francisco bay so Lake Tahoe area is very popular. the net effect of AirBNB is that a lot of real estate around the lake/mountains has changed hands in past years and they stay rented 20+ days per month easily. If you calculate the cashflow from that it's all of a sudden positive by a mile.

However, make sure you are closely monitoring the market trends, including AirBNB competition (check their availability calendars) and also local price trends. You're at the peak of a real estate cycle, I'd be cautious if you see crazy yearly appreciations upwards of 10% year over year for past 3-5 years.

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If I buy the $10,000 Apple Watch, would it buy me more time?

 Hah.. I have a crystal ball :). j/k, follow the white rabbit down my signature line...