All Forum Posts by: Cory Lucas

I truly appreciate everyone’s insight! I hope to respond individually tomorrow. I am just now getting done working a 15 1/2 hour shift, which is why I have yet to respond today. Registered nurse, working in the ER today. I’m sure those couple of items right there paints a picture of how my day was. Again thank you all for taking the time to respond and providing the great feedback. 

Shoot, I meant to include the loan is for 20 years at 5.45%

@Dennis M. See above. Thanks for taking a look and the help

@Tracy Munger

Purchase price on a 3/1 = $47,900

Rent = $900 (might be low, but again i’m illustrating the difference in the numbers)

Vacancy @ 10%: $90.00

Repairs @ 10%: $90.00

CapEx @ 10%: $90.00

Water & Sewer: $75.00

Insurance: $70.00

Management @ 7%:$63.00

P&I: $328.15

Property Taxes: $138.67

Total operating expenses = $616.67



$616.67 + $328.15 = $944.81 monthly expenses

$944.81 - $900= -$44.81 negative cash flow

50% rule is $450 + $328.15 = $778.15

$900 - $778.15= $121.85 Positive cash flow

The 2% rule says I’m getting 1.79%

I realize I’m factoring water in there at $75, which the 50% rule likely does not take into account. I think this has helped me see what needs to be manipulated, but I’m interested to hear the groups thoughts though?

Thanks in advance

@Dennis M. I’m not so sure that’s the case. Even properties that are well below market value don’t seem to work. I’m either almost breaking even or barely showing $25 of cash flow. I’m just wondering if it’s because the percentages pull from the rental income for the percentages I talked about in the calculator.

So that’s why I’m asking if the 50% rule is a good rule of thumb? Just wanting to make sure I’m not missing something, calculating something wrong, or something else? If I’m good on the 50% rule if I cash flow $100 or more that’s all I’m curious of?

Hey BP, curious if anyone has thoughts on the BP calculator with regards to the Rental Property analysis vs the 50% rule? I've been using the rental property analysis calculator and when I plug the expense numbers in and calculate it out I'm almost always cashflow negative, whereas if I use the 50% rule I'm usually cashflow positive. 

So my question to you all is, am I plugging in numbers that just won't work or is the 50% rule a good rule of thumb to go by and I should be ok on a deal if the 50% rule works out? Thanks in advance, the expense numbers I usually plug in is $75 for water, $70 for insurance, 10% vacancy, 10% repairs/maintenance, 10% CapEx, 8% Property Management, then of course Mortgage payment and Taxes

Thanks for taking the time to read and respond if you do. Sorry if too vague, happy to answer any and all questions, didn't want to make it too long

@Cody Malave you ever read anything on Grant Cardone? I just finished his book 10X, so in reference to your issue with not knowing many realtors where you're at who invest, I'd say you need to get out there and meet 'em. Unless you do so they'll never know you're looking to be in the game. Massive action=massive results, so if you have read his book then you should know what I'm talking about! Best of luck, just gotta get out there and ask 'em and start talking. I have yet to go to one myself, but plan to come January, but REIA's are apparently a great way to network with like minded individuals. Best of luck

I've used rentometer a couple times, seems like pretty accurate information. Otherwise a good realtor that's up on rental properties should be able to give you an idea. I haven't reached out to property management companies myself, but I'd think they should have some info too. Hope that helps

@Cody Malave I too have yet to get in the game with a property, but your comment about answers to questions create more questions is a good thing I'd say, means you're heading in the right direction by taking action and educating yourself. Thanks for the post, good questions

@Huso Akaratovic I have a similar personal experience that is almost identical. Neighbors moved out of their house and the people that moved in had sewer backing up a month or two after moving in. Now they did not get an inspection done (dumb on their part) but they took our old neighbor to small claims court and lost.

From the way you laid out your story it’s almost identical, you really should be fine. I’d definitely recommend contacting an attorney if you’re that worried about it, even $100 consultation on how to best represent yourself would be worth it I’d think if they try to take you to court, but (and I’m no lawyer) you certainly don’t owe them anything at this point. It’s an unfortunate circumstance, only thing to me would be how to best proceed to not tarnish your image for something that clearly doesn’t sound like your fault, but I could see these folks spinning it that way...

Hope that helps