All Forum Posts by: Brandon R

Loan Amount $50,000 (includes purchase/repairs)
Repaired Value $77,000 Appraised
My interest rate is 6% over 20 years

P/I $359.00 Monthly Rent will be $700.00
Tax $129.00
Insurance $33.00

I have been learning about cap rates and the annual loan constant and from the math the give me I get a cap rate of .09%. From what I read this is supposed to be good. ???? But when I do it the old fashioned way by adding 45% for expenses plus P/I then I come up a loss.

Thank you in advance

I am considering a lease option or land contract vs renting. Not sure yet

Brandon Reffett

I am in east central Illinois. I have been buying REO properties and have been finding some great deals. My question is, should I hold these as rentals or repair, etc. and put on the market? I get nervous in this market trying to sell anything.

Currently I have 8 properties. 5 are rented and 3 I have sold on land contracts with downpyments. I really like the land contract route as a buy and hold approach.

What do you guys think?

Thanks,

Brandon

Hey All....

Does anyone have a basic SFR rental application I can use?

Thanks..

Brandon

Rich,
But you don't want to loose money monthly correct? Should the appreciation of the home be a bigger concern than current cash flow?
Brandon

So it seems that the best way to invest is to have rentals. Am I understanding this correctly? Using the 40% rule (I manage myself) to find properties that net at least.....$100????? or more?????

Yes I put 20% down but I also refi asap to get my down pymt back. I still will be about 60% loan to value. I typically use a construction loan to update or remodel for the initial purchase.

Example.. Purchase foreclosure
20,000 purchase
4,000 down pyment
10,000 updating
New appraisal = $55,000
Refi at 65% or 35,750
Gives me my out of pocket back still 65%LTV
Advertise sale on Land contract with 10% down.
Get my out of pocket back at refi plus 10% plus monthly.
I would charge around 550-600 depending on the area, etc..

Thank you Curt..
If I eliminate the management cost would that change your opinion.

Truthfully, I don't see much appreciation in this neighborhood even though the school dist. is good. Its a small subdivision with mostly 800-1100 sf homes on slabs built in the 50's. All are close together with a value range of 15,000-45,000.

Mike,

Is that the way to figure all investment properties? I manage myself so would that be 40%. ? Is there another way to figure if its a good deal if I focus on selling on land contract instead of just renting. Eliminates much costs and risk.

Rich..
I am considering selling all my properties on land contract with 10% down. No managment, No repairs, Less Headache. I posted another strategy question after this one about that. I dont need to make any repairs at all. Its rent ready. I just think max $5,000 would make the home really nice. Not necessary. Not going to flip it.
All my loans are kept in house, 7%, 20 years. I get as many as I want.
The home was built 1955.
I will be paying income tax on the down payment and monthly income.
My strategy is buy and hold but to do it with land contracts. If they walk. I just do it again with another down payment. Seems a bit better than plain rentals.

900 Sq.Ft. 3/1 on slab with 1.5 car garage in prime school district. Asking 24,900, owner purchased for 15,000 1 year ago. No major improvements. Home is in average condition/rentable. Mls indicates owner needs to sell. I would pay no more than 20,000. (if that is a safe purchase price) The home would be worth around 35,000 if it is updated. Not much maybe 5,000 high end.
House currently rented for 400 per month.
Taxes 60.00 per month
Insurance 20.00 per month
I am required to put 20% down and my bank charges me 7% over 20 years.
Any suggestions would be appreciated. After looking and looking this seems to be the best property at the moment.
Thanks....
Brandon