All Forum Posts by: Brad Meyer

Thanks Doug!

Hey Brett - right now I'm thinking of generating cash flow with rentals.

My question is in regards to how commissions and vacancy affect the buy price.  I understand when flipping a house, most calculations take into consideration how much you'll have to pay in commissions when you sell the house.  My questions is focused on the buy and hold strategy.  First - how many years do most investors consider a "hold" for?  Let's assume I buy a property for $100,000 and it cash flows $200/mo and brings in $1,000 in rental income/month.  Eventually, when I sell the property I'll have to pay $6,000 in commissions (not considering any appreciation).  This would take 30 months to break even on if I had absolutely zero months of vacancy.  I understand you calculate a percentage of vacancy in the buy-side formula but that doesn't seem to account for an absolute true vacancy for a month.

Bottom line - I seem to understand the general "rule of thumbs" when it comes to cash-flowing the house and making sure you buy it right so that you can accomplish that.  I'm not understanding where future expenses are considered that will dramatically eat away all the cash flow.

Hey guys,

  My name is Brad and I'm a new member.  I used to work in commercial real estate several years ago before I moved into the oil and gas career.  I've always enjoyed real estate and have recently decided to get back into it.  This site has been extremely informative as well as motivational.  Look forward to getting involved.

-Brad