All Forum Posts by: Brice Hall

@Jeff S., sorry going back to your origional post, you said: 

"So, forget the 50% rule. And, the 2% rule won't help you either. For 3 properties I would estimate at least 750 mo for maintenance and capex."

I completely agree with forgetting the percentage rules with these properties now. But you said to estimate 750/mo for maintenance and capex. So you would say $1000 per month for four properties? it would really be this high? thanks again

@Jeff S.thanks for the feedback, i agree! i did meet the tenants, and they appear to be taking care of the properties and plan to stay put for awhile. I guess what i'm really looking for, is an average per house of cap ex and maintenance i can expect over 5 years, 10 years, and 15 years. 

@Steve Kachniewicz you make valid points! But have you ever actually experienced these type of properties?

@Steven Segal thank you for the feedback! you mention:

"From my experience, I think 10% CapEx, 10% maintenance, and 7.5% vacancy are probably a little low. These are older homes. If the 7.5% takes into account money not collected, it will definitely be more. If you purchase one and it goes vacant immediately, you will have to pay for the turnaround."

What would you estimate them to be? what have you found your capex and maintenance to be over the long haul? For these types of properties, what is the average $ amount of maintenance/cap ex per 5 years? 10 years? 15 years? Anywhere to find these numbers? thanks again!

@Account Closed - how accurate has the 50% rule been in your case? i'm not sure how the 50% rule can apply when rents can vary from 600/month to 1200/month.

@Kyle Penland thanks for the response! what are you finding your cost per month per property for capex? have you held any of these properties for a longer period of time, where one major capex (roof, etc) could wipe out A LOT of rent? What are your thoughts on this article? (thanks for sharing @Frank B. !)

http://www.biggerpockets.com/renewsblog/2015/03/03...

@Kyle PenlandThx for responding, I need to double check this, but I'm pretty certain that the landlord is paying trash and sewer. Perhaps to avoid liens or for some other reason?

I did a brief walk with a GC, and the properties are all rent ready and maintained. As they are all older I should expect a little higher capital exp, but likely nothing major for at least a year, in which I could begin to build a reserve 

Update:

@Mike D'Arrigo

@Gregory H.

Thank you all for the continued feedback. As of now, i've negotiated the price down to $67,000 (from the original $89,000). Does this change any of your opinions? Or would any price change your opinion? So the numbers look like this:

Price: $67,000

(Annually)

Max possible rental income: $22,800

Expenses

CapEx (15% rent): $3,420

Maint (10% rent): $2280

Vacancy (12%): $2280

Trash: $1056

water/sewer: $1680

taxes: $1677

mgt (10%): $2280

Total Expenses: $14673

ROI: $8127

Cap Rate: 12%

Do you think my numbers are conservative enough? Perhaps too conservative, as i have expenses as 64% gross rental income.

Thank you all again!

UPDATE

@Frank B.

@William Hochstedler

@Kyle Penland

@Davon Lowery

@Wayne V.

@Account Closed

Thank you all for the continued feedback. As of now, i've negotiated the price down to $67,000 (from the original $89,000). Does this change any of your opinions? Or would any price change your opinion?  So the numbers look like this:

Price: $67,000

(Annually)

Max possible rental income: $22,800

Expenses

CapEx (15% rent): $3,420

Maint (10% rent): $2280

Vacancy (12%): $2280

Trash: $1056

water/sewer: $1680

taxes: $1677

mgt (10%): $2280

Total Expenses: $14673

ROI: $8127

Cap Rate: 12%

Do you think my numbers are conservative enough? Perhaps too conservative, as i have expenses as 64% gross rental income.

Thank you all again!

@Greg Hiban thanks again for your additional feedback. i've also now learned that property managers here have to be brokers. Not sure if this is fact, and how regulated it is, however.

@Mike D'Arrigo thank you for all the great feedback. i do, however, have two brother in laws that have properties in the same town, a father in law thats a GC in the same town, and a grandmother that is a realtor int eh same town. So these contacts, along with seeing other people successful at it, and a high demand for rentals and low to no new development is what made me take a closer look.