All Forum Posts by: Craig Dieterich
Craig Dieterich has started 13 posts and replied 39 times.
Post: What are your throughts on these numbers?
- Posts 41
- Votes 56
It doesn't meet the 1% rule as far as a cashflow property. It would need to rent for at least $2000/mo, and that's the bare minimum. If you don't care about cashflow and this is a property that you feel is in a growing area and sure to appreciate, or a property you see yourself living in down the road and just want to get some renters in there to pay the mortgage down, then cool. But from strictly a cashflow property, I don't see this working.
Post: How do I get a small loan amount?
- Posts 41
- Votes 56
Originally posted by @Scott Lands:
We've gotten some funding thru this company based more on our personal credit. They can be pretty creative. No upfront fee, but there is a finders fee or something they add to the loan on the backend based on funding it.
https://apply.fundwise.com/unsecuredfundingoptions
Thanks, contacted them, but their terms don't make any sense for buy and hold properties. The money is too expensive.
Post: How do I get a small loan amount?
- Posts 41
- Votes 56
I'm currently looking at rental properties in the $40-75k range with 25% down, but cannot find lenders that will do loans that small. What are the options?
Post: when, if ever is it ok to use sellers agent?
- Posts 41
- Votes 56
when looking for out of state investment properties, is it ok to call the listing agent? Seems like they would have the best info on the property being they obviously already been inside it and probably know everything there is to know about it, right? If I like the property, should I find another agent to use for the purchase, or is it ever ok to use the sellers agent?
Originally posted by @Jon Ladd:
@Craig Dieterich - Well, it’s not something I would have done given how far you are from the property meaning you’ll have to hire a property manager to re-rent
the property if/when your existing tenants leave. That’s a lot of work and expense for a $35k property. Additionally, the property is in a depressed are so appreciation will probably be non-existent
However, your cash on cash return is roughly 20%/yr., which is nothing to sniff at and you’ll have your investment capital back in roughly 5 years.
So long as your tenants stay and pay you are fine. If they don’t, its going to be a bit of work and time to get the property rent ready and rented.
Good luck with it!
Jon
@Jon Ladd
Thanks Jon. Yeah, I understand it's not likely to appreciate much being in it's area. It's more about paying myself back, then collecting passive income. And doesn't every rental investor hope their good tenants stay forever? The good thing with this, is that since I paid cash, if it sits vacant for say 2-3 months, I'm not paying on any mortgage. The months it sits vacant just ad to the timeline of collecting my full amount back. That's just my logic anyway. lol. And yes, I factored in property management into my costs.
Post: [Calc Review] Help me analyze this deal
- Posts 41
- Votes 56
Originally posted by @April Munoz:
50% Rule: 550 x 12 = 6600*.50= 3300 - Mortgage cost = (if the number is positive its a deal)
10% Rule: 550 x 12 = 6600/80000*100 = 8.25% (Fails the 10% rule)
1% Rule: 550/80000*100 = .6875% (Fails the 1% Rule)
Just based on what you provided its a no deal for me.
@April Munoz it's a 4 plex. each unit rents for $550. The total monthly rent is $2200
Post: [Calc Review] Help me analyze this deal
- Posts 41
- Votes 56
Did I do something wrong? The CoC seems unreal. Its a $80,000 4 plex that each unit rents for $550
*This link comes directly from our calculators, based on information input by the member who posted.
Post: [Calc Review] Help me analyze this deal
- Posts 41
- Votes 56
I realize I accidentally put 1000 lender points
Post: [Calc Review] Help me analyze this deal
- Posts 41
- Votes 56
*This link comes directly from our calculators, based on information input by the member who posted.
Thanks for all the input/advice. I feel like it's a good deal that makes sense, but obviously several others on here feel differently. I agree there is always risk with tenants, the quality of the rehab work, the area, taxes in that area, etc. I think I covered my bases by calling the assessors office to get accurate property tax info, had a home inspector go through both units thoroughly since I could not be there, and also found a local PM that said these units should be easy to re rent if the current tenants left. Also, the current tenants have been there for 3 months so far and the inspector said they had been keeping the place very neat and clean. One tenant is a disabled veteran which I like because it means guaranteed money for rent. Again, my real original question with starting this post was about whether its a good idea to pay cash for a deal from a taxation perspective. But as many here pointed out, taxes are inevitable, and if I'm paying them then it means I'm making money.