All Forum Posts by: Brian D.

@Brian D.. Do not get bogged down in the details about capex. This deal is not even in the ballpark of a good deal in the Metroplex. You can get $1300 for a house you paid $100,000. Why would you consider paying $155,000?

Thank you for the replies. I've just started looking and am looking in the mid-cities area just because it's what I know best and could easily keep an eye on. I've not seen anything yet around here that's $100k, unless I go to maybe Arlington or Irving. Granted this is only me looking MLS or craigslist. I don't want to get into "C" class properties if I can help it. Also, it may be that this house could rent for $1400, I'm only going by the median on rent-o-meter.

0 Votes

Originally posted by @Brandon Battle:

Yeah Brian,you need to run your numbers again.Capex is not part of monthly calculations,8% vacancy and maintainance should be no more than 5%.Check your property taxes again,how much is it yearly? It can't be that high on a $155,000 house,can it? Also,screw that half off the first months rent deal until you seriously get desperate.Don't flush $650.00 down the toilet without giving it a chance. Recalculate and you may find the deal tastier.

Thanks for the capex, vacancy and maintenance suggestions. Yes, property tax is $2675/year. This is Texas: no income tax, but high property taxes (please don't let this get off on a side-tangent).

So if I do 8% vacancy, 5% maintenance, no PM fees or advertising, that's $318/mo cashflow, or 12% on initial investment of $31k down.

0 Votes

Originally posted by @Simon Shih:

There are some investors that do not agree with this, but if you are wanting to invest in real estate...Never pay retail.

A hot market means that retail houses are selling quickly. If you buy a distressed property and flip it, then you shouldn't have to wait long to sell. It means that people looking to move and buy a new house are paying market price. It means if you are wanting to sell your family home that it won't be on the market long. It does NOT mean that you should have to pay retail or more for an investment property.

$26 dollars is not much of a return on your money and CAPEX is not something you add into your numbers.

Based on some of the things I'm seeing, you should do a little more research and educate yourself a little more before you drop money on your first property.

Thank you for the response and clarification about hot markets. I'm getting the message here

1. Don't pay retail
2. Capex isn't an operating expense
3. I need to learn more

(3. I already knew)

1 Vote

Originally posted by @Jason Emery:

@Brian D.

Is this a situation where you can make an offer on the property or do you have the feeling what the fixed price is?

If you're learning, you could calculate what an acceptable price would be. Or if you made an unusual deal with seller-side financing or some other exotic strategy. Not that the seller might accept it, but if you are up front about why you'd pay less, you might get the seller to rethink whether they are overpriced.

Also, what is 'Rent-O-Meter'? How did you determine that number? Just curious there.

I'm learning this too. :D

It's just on the MLS. I can make an offer, sure, but I haven't seen the property yet to see if it's as updated as the listing says.

rent-o-meter.com I discovered on the forums here last night.

0 Votes

Originally posted by @Account Closed:

@Brian D. I can tell you how to fix the problem. You are in the Metroplex. You are wanting to do buy and hold.

Do not under any circumstances pay retail to a turnkey company here!

I'm a little confused. Are you saying don't pay retail, don't do turnkey, both? What is it about DFW? I've been under the assumption (likely wrongly) that this is a hot market right now and most stuff is going at or above listing price.

0 Votes

Originally posted by @Bill Jacobsen:

I would ask the PM what he thought the rent would be and show him your other numbers. My experience is that PM charges an extra amount to find new tenants.

I am seeing a cap rate of 5% which is low. Capital expenses are not part of net operating income nor in the calculating

I included Advertising, which is the listing fee the pm charges to get a new tenant. Thanks.

0 Votes

For my very first deal, I'm considering going turn-key through a PM. He sent me a list of 5 and there's one I like, so I'm trying to run some #s on it to see if I have learned anything.

It's a 3/2 newly updated all around, good B neighborhood with good schools for $155,000. Rent-o-meter shows $1300/mo.

Prop taxes $223

Insurance $67

PM $95

Advertising $54 (half month rent/12)

Maintenance, capex & vancancy I said 8% each, so $312

Total Expenses $751

Mortgage payment $523

So cash flow before taxes of $26.50/month. Thoughts? Anything I'm missing?

0 Votes

I live in Euless, TX (mid-cities area of DFW). Looking to buy some rental properties for buy & hold. I found BP while searching on reddit for info about land lording. I signed up in July, but have been talking with my wife about it and I started listening to the podcasts this weekend. I've listened to 12 so far.

I know a realtor and I believe she does some investing, but she lives on the south side of town, not really that close. We did look at moving last year, so we did pre-qualify at that time, shouldn't be too hard to update it.

Anyway, I'm trying to figure out what I need to learn about to get started.

0 Votes

All Forum Posts by: Brian D.

Brian D. has started 2 posts and replied 9 times.

Post: How New Western Acquisitions Made Me Lose my Life Savings ($70k)

Post: My first deal analysis, please critique (Dallas)

Post: My first deal analysis, please critique (Dallas)

Post: My first deal analysis, please critique (Dallas)

Post: My first deal analysis, please critique (Dallas)

Post: My first deal analysis, please critique (Dallas)

Post: My first deal analysis, please critique (Dallas)

Post: My first deal analysis, please critique (Dallas)

Post: Newbie from Dallas/Fort Worth area