All Forum Posts by: Cameron Lam

@Dan Heuschele thanks for the feedback. House 1 actually brings in 2450 in rent as the master brings in an additional 600 when I moved out and a converted loft to bedroom is an additional 475. Its true that after reading this forum I need to do a better job on capex estimates. This house has replacement reserves of 168 a month. Since it was a new build I think I got away with that but for a couple of my older ones I'll have to go line by line and redo projections off useful life. I was using 7 cents a square foot based on one of my mentors who has 3000 sfh units. This first house only brings me 11.92% CoC when its all said an done. Since it was my first I put a lot in. I'm actually working with unison to pull out 36K which will bring my CoC to 22% and give me money for something else.

@Paul Kalbfleisch completely agree. See my response a couple above where I break out the cash on cash numbers.

@Nicole Clemens yes I do! I work from home maybe 3-4 days a week and have a very flexible schedule. No plans to quit until the passive income hits about 120K a year after taxes

Great question! I think an even more insightful inquiry is how much money have I put down to get $5K

Properties with no partners (5): $1.08M in loans.  $108K in down payments and rehab.

Properties with partners(3):  $0.38M in loans(My portion).  $52K in down payments and rehab.

Total: $1.46M in loans.  $160K in down payments and rehab.

50-60K yearly cash flow/$160K investment = 31% to 37% returns.  The only wrinkle with this is the fact that I have a house hack with AirBnB that I count as pure cash flow.

If you took the AirBnB out of the house we currently live in and removed that house entirely it would be:

35-45K cash flow/137K investment = 25.5% to 32%.  

The reason my numbers are higher than what I stated in my post is that these were my actuals for the year.  I'm sure that over time it will average closer to 20% with repairs and capex.

Thank you! Personally, I had a very specific criteria in mind. My realtor set up a search for me on the MLS and I had my own search on zillow. My search generally tries to meet the 1% rule where you think you can get 1% of the purchase price in gross monthly rent. So if its $100K you want to see if you can get $1000 a month. Since mine is by bedroom generally I'd like for 2 Bed 1 Bath for $100K or lower...since I can get $900 to $1000 a month for that. For 3 Bed 2 Bath I'd go $150K or lower...since I can get around 1400-1500 a month etc. I'd have a realtor set up a search for you with specific criteria in mind. Then when these houses came along I would do an analysis on them to see if Cap rates and CoC met my criteria. My personal criteria in this market is 8% cap rates and now 20% cash on cash and that includes repairs I'd have to make.

It often times depends on the group.  If it's a group of friends that is moving into a house together I won't bother furnishing the place.  If it's random students/young professionals claiming rooms one by one then I'll put more of an effort to have a couch, table, tv etc.  We even have a nice pool table in one of them!  My properties are all within 5-20 minute drive of community colleges and ASU.  I used to do this when I got a smoking deal on a cleaner but I'd send a cleaner in twice a month who charged me $40 each time to clean the kitchen, floors, bathrooms.  I would have the tenants split the 2nd $40 charge if they wanted it and I found that people were just generally happier and kept the entire place in better shape.  It's like doing the dishes...when there are no dishes in the sink and you put one in there you will clean it.  Once it starts to fill and gets messy then no one bothers even doing their own dish.  My cleaner unfortunately left AZ so I need to find a new one...

Yes, I charge utilities through a Venmo request to my tenants about 10 days after the month's end as the bills come in.  I aggregate all of them and then divide it by the number of tenants.  I'll send a copy of the bills if they like but only occasionally do I get asked for that.

This is a great question! So I have one LLC for the properties that are held just by me...and a separate LLC for the properties with my brother. I might have to make another for the one with my friend here in March but I have not decided yet. Don't want to create too many to be honest. I also created separate bank accounts with different debit cards for each one. Water, sewer, electric, gas, internet you name it is charged to the corresponding card.
I also experimented with some rental expense tracking software like Stessa but I wasn't impressed.  I just use a good old Profit and Loss statement with 12 tabs for each month that summarizes everything into a yearly view by property.  It's a little time consuming but then again I do finance for my work and I just open up the bank account that corresponds to that property to plug in the inflows and outflows. 

First off Happy New Year everyone!!! I was sleeping in so just getting to responding!

@Sterling Chapman thank you for the kind words! I'd love to hear about how your journey has progressed from the $5K number!  

@Marty Summers wow only 6 properties to cash flow $5.9K? Did you put a lot down for these? That seems like the CoC numbers are out of this world.

I've heard of the word syndication but never even contemplated it or looked up what it is.  You've got me intrigued now and I'll be reaching out to you in PM.  Thanks!