All Forum Posts by: Account Closed

Never taken for granted. Always appreciated. Two family owned organizations that are near and dear to my heart.

1)The Dodgers

2) In-n-Out

Follow these two empires, and you'll do just fine in RE investing!!!:)

Hi A,

There's a group on here that's centered in the Inland Empire. (search in the "groups" area) I would def. join that group as I think they meet every month in person (point being they are proactive collectively). Ask some of the members if they recommend a prop. manager or company in the area. Be weary of Property managers on here looking for biz but if so, reward their diligence and effort.

Good luck!

I don't believe "in one or the other" rule. I do believe in the 168 hour rule. There's a 168 hours in the week. Plenty of time to do both.

The difference between going out and actually doing is confidence. Depending on your confidence level, I think you go out and do. Books are good for helping that confidence level. Jumping in feet first cash in hand can be fatal for newbies on the first deal psychologically. Teaming with a mentor is almost a must, even if it's just shadowing them.

Thats my plan at least, spoken from a TRUE newbie. My thoughts are if, and when, I can hang in a conversation with experienced investors, then I am ready to approach one as a mentor and lead them to their next deal, and NOT ask them to hold my hand. I expect no compensation in return for the first but do ask and expect fairness in their consideration of my work and diligence. The next deal will then bring even more to the table.

Thoughts? Comments?

Are you meaning software or physical functioning calculator?

I'm not sure about the whole "million dollar real estate investor" thing but I can recommend getting familiar with a HP 12C (Gold) calculator. (check e-bay or craigslist) It functions on Reverse Polish Notation (RPN) and has been a great for the financial world. There's also a book on amazon that a guy wrote specially for the HP 12C and RE investment. I just got it in the mail and can't recommend it at this point but will be checking it out as early as today to check his work.

Hope this helps.

Hey Shamim,

Welcome to the site and make sure to be active. The more active you are, the more you'll get out of it. I can't speak for many guru books but I can speak for the site. You ask questions, you'll get answers. Plain and simple and free of charge:)

Your LA neighbor!

Cheers!

Thanks guys. That answered my question perfectly.

This will help to know when analyzing in the future.

Does the 50% of expenses incl. Prop. Tax & PMI? Here's my situation and whether or not I include it in my evaluation.

Example: duplex (2 units) 100k financed; no rehab necessary; "as-is"

Gross rents: $1,730

50% exp. ($865)

NOI: $865

Princ. & Int.: ($665) (30/yr @ 7%)

PMI: ($41) (@ .5% in CA)

Prop. Tax: ($125) (@ 1.5% in CA)

Cash flow: $34 divided by 2 units= ($17/unit which is not my standards)

On the flip side of the original question, if you leave out Prop. Tax and PMI, you then have a cash flow of $200 leaving $100/unit which now meets my minimum standard.

so...how does PMI and Prop. Tax play into this? I need to know so I make sure I am uniform in my evaluations and analysis from one deal to the next another.

To further check my numbers against the 2% rule,
my gross rents/value falls at .0173%... just shy of 2%.

To fully meet 2% with the given gross rents, I would have only offered $86,500.

Would you do this deal or not?

Thanks!

Just be careful on the low dollar homes - a lot are being offered on QCD only and your responsible for any taxes / water (today I had a list of 10 homes - $10K and the back water came to $45K) so just be careful.....

Hey Robert,

What does QCD mean? And as far as water...to buy the water rights?

Thanks.

What area of San Diego?

Even at 350k, you'd have to have gross rents up at around $5,057 for units to cash flow. However it may be well under market which could make it interesting.

Need more info on area.

Hey Jon,

I was wondering when configuring these cash flow deals, do you take the deal based on the purchase price (regardless of equity); or based on the mortgage? I'm slightly confused on that area. Only reason I ask because I saw another post where a few others had posted on the time value of the equity Internal Rate of Return (IRR?). (guy was going to put 50% down so that it cash flowed)

Anyhow, this is what I came up with Purchase price @ 75k:

Rent: $750
P&I: less $474.05 (based on 6.5 @ 30yr)
Expenses: less $375 (based on 50% rule)
cash flow: - 99.05

As far as maximum offer under the 50% rule to cash flow $100 on this particular property:

$43,508