All Forum Posts by: Brice Noonan
Brice Noonan has started 2 posts and replied 6 times.
Post: Ten loan limit a soft ceiling?

- Water Valley, MS
- Posts 6
- Votes 0
Hi George. Understood. Certainly not anything that affects me any time soon. Just curious. It seems this #10 comes up a lot on these forums and I wondered if something I had heard about was a viable option.
Post: CF vs 50% vs 2%

- Water Valley, MS
- Posts 6
- Votes 0
Thanks Matt, that is exactly what I was looking for. The points on the 2% rule are particularly helpful.
Post: CF vs 50% vs 2%

- Water Valley, MS
- Posts 6
- Votes 0
Thanks Ned. Yes, so I seem to understand the 50% rule I guess. It just seems whacky to expect to spend $6600/yr on 'expenses' for properties like this. (when I have already factored out PM, mortgage and taxes)
I do appreciate the issues of roof, fence, HVAC. But honestly, on a house that is <10 years old, I cant envision spending more than $30,000 on this over the next 30 years (1 new roof, 1 new HVAC, 2 new Water Heaters).
Oh, and I came across the 1/3 (33%) rule: P&I < 33% rent.
No financing in the Baltimore area? Why is this? Is this a widespread issue?
Post: CF vs 50% vs 2%

- Water Valley, MS
- Posts 6
- Votes 0
Thanks Jennifer. I'm the same, investing for the future, though I don't mind my CF building and contributing to the down payment for the next property. Just wondering why these metrics predict such a minor contribution to this pot in the form of CF.
Post: CF vs 50% vs 2%

- Water Valley, MS
- Posts 6
- Votes 0
OK, again (if you didn't read my 1st post) I live in a nice college town with high occupancy rates, good rental rates, inexpensive properties, etc.
I have been wanting to get this going for years, been reading/studying on & off all this time and am now getting things going.
After lurking on this forum for some time, I realize that my reading has focused on motivational books with little substance and I am now struggling to come to grips with the cold calculations of the REI experienced here on BP. So can someone run through what I consider an average purchase here in the area and tell me why what looks to be great CF is mediocre when viewed through the lens of these 'rules'?
(NOTE: I am not interested in purchasing trashy places cheap ($20-40k) for higher CF. Just not my thing. I know it works well, just not much of it around here in rentable areas and I'm not in to it.)
OK. Lets consider a hypothetical 3/2, recent (<10 years old) SFH is about $80k.
Lets assume, for the sake of argument, I pay this.
Cost: $80,000
Down: $16,000
Closing: $2,000
Rate: 5%
Mortgage (incl Tax): $430
Say I even go with a PM: $120/mo
Insurance: ~$500
Rent: $1100
Gross income: $13,200
Expenses: $7,100
This looks like solid CF to me.
But compared to the 2% rule, it seems borderline (1.3%)
Doesn't meet the 1/3 rule.
Not sure which end of the 50% rule PM fees are taken out of, but with Insurance CF from this metric is thin too.
What am I missing? Why am I excited about properties that it seems the most experienced of you would avoid?
Thanks for your help.
B
Post: Ten loan limit a soft ceiling?

- Water Valley, MS
- Posts 6
- Votes 0
Hello all. New to the forums. Been reading the books and dragging my feet for years while I established my professional career (love it, not looking to leave, just supplement).
So I live in a nice college town where occupancy rates are high and the leases run 12 mos. and I'm ready to get into the game. Met a realtor that also owns rentals and owns/runs a PM agency. Good brain to pick. In discussing my plans for ~10 properties, she mentioned a workaround that many of her investors had used (she flies to CA with deals for investors and sells local rentals, has buyers with many properties).
Tell me what you think:
Basically, assume you live in house 1, rent out 2-10. She said you can bundle 2-10 into a commercial loan (a dispersed multi-fam if you will), gets you back down to your OO home and one commercial. 8 more slots to fill? Is this possible, oversimplified or accurate?
Thanks,
BPN