All Forum Posts by: Chris Lounsbury

Quickly using the 50% rule I came up with slightly different net income but it is still positive cash flow. I had to estimate your mortgage payment, and using the FHA calc i came up with $570/month. Is that close? If so, deduct 50% for all other expenses + mortgage payment comes to $1,270/month. So I have a net profit of $130/month or $65 per door. Remember though the 50% rule is a rule of thumb and should not be your only analysis.

Is there any value you can add to the house when you buy it? If you can add value perhaps you will be able to raise rents slightly and get a better ROI. All in all though, its a decent deal, and if this is your first one go for it! You have to get started somewhere and house-hacking is a perfect way to go. All of the saved rent money can be put away to get going on the next deal.

Good luck!

Thank you Patrick!  I have been contemplating getting an organization/management tool to help keep everything on track as I continue to scale.  I will have to look into Dotloop, it sounds like exactly what I need.

Hey Grant, my understanding for the 50% rule is its just a rule of thumb.  Meaning some markets may overestimate while others underestimate.  With that being said, the 50% rule is supposed to be a very conservative number.  You never want to fall into the trap of not saving money for expenses that you will surely run into at any given time.  

Repairs will differ based on the market as well.  You have to take into account that the quality of work and the quality of products that end up being replaced will most likely be better, meaning more expensive in higher market areas. 

Although it may be more difficult to find houses where the numbers work in your area, don't stop looking for the deals.  All it means is you have to network more and make sure you are buying at the right price.  If you're mortgage is lower because you were able to get the house at the right price, with the right terms, that 50% for expenses wont seem so daunting. 

@Eric Dea Congrats on getting started and I look forward to speaking with you next week!

Great @Deshawn Lewis!  Look forward to talking to you.  I will send out colleague requests and information on the call when more people have had time to see this post.

@Yair Coronel Congratulations on taking the first steps towards success!  We all had to start somewhere, and just by reaching out you've shown the initiative that so many other wannabe investors never are able to do.  If you are serious about taking real estate investing head on, then I would love for you to be a part of the call.  If I were you I would spend this upcoming week submersing yourself in education materials.  Keep on listening to the podcasts, reading the blogs and forums, but also picking up a few books and reading those as well.  Towards the end of the week when more people have responded I can figure out how we will go about getting this conference call under way.  Good luck!

Hey BP family, I'm looking for a few guys/girls that are somewhat new to the investing world but very determined to succeed to do a weekly conference call.  I just finished my first deal and have my second under contract now, but I really want to start scaling my business.  My goal with the conference call is to set up a place where we can all be accountability partners.  To push each other and help each other stay on task and dream big.  You don't need to have completed a deal yet, but I would really like the serious investors, the ones that really wanna push themselves to reach out and hopefully we can set this up to start next week.  

Trenton Jackson by seasoned I mean the duplex has to be rent stabilized for 12 months, sometimes 6, but most often 12 months before a conventional lender will consider lending. I will PM you later when I get home to discuss any other private lenders you may know of. Thank you very much!

Thank you Dick Maykel Ortega . I forgot to mention the rates are high because that refinancing is not a conventional loan. We are unable to obtain a conventional loan because the duplex hasnt been seasoned yet. Our private money lender offered us the rates you see. The interest rates are high, but I was debating using this lender for 1 year and then refinancing with a bank again next year for a lower interest rate. We could technically hold the property for a year and skip doing this refinance but then our money will be completely tied up for one year. Am I being unreasonable thinking i will be able to get this property refinanced a second time with a conventional bank loan or am I actually making sense (i'll be very surprised if I am haha)?

thank you again @Chris Shipman.  I will continue to shop around, but your tips definitely help stomach the price paid haha.