All Forum Posts by: Brad S.

I actually live in Wyoming and I am very familiar with the area. Message me about the details and I can give you a more on-the-ground experience. But my preliminary thoughts is that it is probably a bad idea unless it is a) for a home you are going to live and stay and b) you get cheap labor. The space won't count in your square foot calculations and IIRC, the MLS doesn't report them. Basements are a good selling point, and somewhat expected around here, but IMHO don't generate a lot of added value to the home.

Wyoming, with the top schools in the state and among the best in the nation, is in good demand for families.  Anything you can do to make it more appealing to families in that price point, the better.  If it doesn't have it, the closer you can get to 4 beds 2.5+ baths the better.

You just need to tell them you are looking for a capacitor or some other small electronic part.  They'll surely leave you alone.

I don't think there is much hope for Radio Shack.  They really offer a little bit for nobody.  They have abandoned the hobby person and tried to become a small Circuit City or Best Buy.  We know how Circuit City turned out.  Best Buy is not too far behind.

No it doesn't make rational sense. However, you are talking about an irrational problem. Chances are, they are looking for $5-10 bucks for their next high.

@Terry Hershberger Good point. What is a good budget for low end bath and kitchen?

@Shane Johnson Thanks for the suggestion. I have looked at Rentometer and elsewhere for comps and they show median rents ~$475 for 1 beds and $595 for 2 beds. Your method would yield actual rents however.

@Joel Owens Thanks for the quick review. It's not totally stripped, but not a gem either.

Am I estimating too much for cap ex and maintenance reserves? I want to make sure I'm covered, but I also don't want to over estimate to the point I'm loosing out on deals.

One other question. It shows $4,500 escrow for water heater and HVAC repair. How does this work? Is this something I get back at closing or after proof of repair?

I'm looking to make my first offer and need some help checking my numbers. It's a brick 4-family (2-1bed, 2-2bed) in a lower income, but decent/low crime neighborhood on a street with other 4-families. The property is vacant so there is no actual expenses available.

Numbers:

• Asking price: $50,000
• Repairs/Upgrades: $20,000 (needs driveway, HVAC repair, water heaters and possibly kitchen/bath upgrades)
• Monthly gross rents: $2,130
• Expenses: $1,476 (69% - seems high but breakout below)
• Income after expenses: $654
• Mortgage payment (25% down): $282
• Monthly cashflow: $372

Monthly expense detail

• Taxes: $383
• Insurance: $62.50 (estimate)
• Property management: $213 (looking to self manage though)
• Vacancy: $191.70 (9% assumed)
• Utilities: $150 (SWAG estimate owner pays water/sewer)
• Maintenance: $213 (10% assumed)
• Cap Reserves: $213 (10% assumed)
• Grounds keeping: $50 (SWAG estimate-mowing & snow removal)

Besides input on whether this makes sense, I have a couple of specific questions:

1) I can never hit the 50% rule when I run the numbers. Do you include vacancy rate when calculating? I'm I being to conservative on my maintenance and cap reserves (10% each)?

2) How much should I factor for grounds keeping (Ohio) and water/sewer?

Welcome to bigger pockets. I second @Matthew Watkins recommendation to join Cincy REIA. It's a great organization with the ability to network with on-the-ground investors.

@Joe Delia The Cincy club is great. I have been taking advantage of the sub-groups and after meetings. These really give you a chance to meet and network and hear the "really-really" of the area and advice. I just saw Mary & Joe last night at the landlord sub-forum. They're a riot!

I'll PM you about Norwood...

@Mehran K. Great advice!

@Will Barnard and @Brandon Turner

Thanks for the warm welcome and happy to be here.