All Forum Posts by: Raymond Van den Ende

Hello all,

I'm very sorry but I somehow managed to completely miss the latest replies :oops: :oops:
Emmy, where are you from and how are you doing? Have you alreade invested over here?
Michael, if you do a major rehab it's possible to raise the rents but easier said then done....

I just noticed the checkbox: "notify me when a reply is posted"' :lol: so I will react very quick now!

Greetz, Ray

All,

Thanks for the replies! It looked to me as the 100$ cashflow was some kind of holy grail. I see a lot of deals being turned down when there's only looked at the 100$ cashflow requirement without even considering the return.....But I guess its easy to analyze a deal only on 1 criteria rather than looking at the whole picture?!

Greetz and happy investing

Ray

Thanks Matty, your exactly showing my point here! It looks to me that there is a big focus on the 100$ cashflow but imho there's more to it....

P.S.
http://www.biggerpockets.com/forums/12/topics/21688-difference-between-roi-cash-on-cash-return?highlight=

The numbers are there to show my question and do not relate to an actual deal. I see al lot of focus on the magic 100 $ / month cashflow but this seems in no way related to the investment made. To clarify:
If I sell homemade icecream (investment of 50$) a 100$ profit can be good but if Ben&Jerry makes a 100$ profit (investment of ????) this would be considered extremely bad......

Hello all,

I was thinking about the 50% rule and I was combining this to the ROI. When you evaluate a deal do you factor in your own investment (money wise like down payment) or not? Example, would this deals (not real numbers) require the same 100$ cashflow or would you adjust somewhere?

1. Rent: 6000 /year
NOI: 3000 / year (50% Expenses)
Cashflow: 1200 / year
Leaves: 1800 / year for mort
=> Max price ~ 22500 (30 year @ 7%)

2. Rent: 60000 /year
NOI: 30000 / year (50% Expenses)
Cashflow: 1200 / year
Leaves: 28800 / year for mort
=> Max price ~ 360700 (30 year @ 7%)

My feeling tells me to buy 15 number 1 properties to enjoy 1500 / cashflow :-) / relate this somehow to my investment. What about you??

Greetz,

Raymond

I'm trying to learn as much as possible and for now my "main" lessons would be:
1 Get off the couch now
2 You make your profit when you buy
3 Cash(flow) is King
4 Treat this as a business not as a hobby

I live in Holland and over here EVERYTHING is regulated and real estate is no exception. For example:
You can not charge too much rent for a given appartment (max would be app 600,= EUR/month)
You can not evict renter: renter protection is really extreme
You can not raise yearly rent by more than the inflation rate (this year 1.6%)
Most mortgage's are guaranteed by a special fund in case of default

I'm targetting on appartments with after repairs value 100.000,= EUR (give or take). Due to the above restrictions it's (to my knowledge anyhow) impossible to buy these appartments for less than 65%-70% ARV (already rented out).

ARV: 100.000,=
Price: 65.000,= (including renter)
Buyer cost: 6.500,= (10% over here)
Equity: 28.500,=

On average people will move every 7-8 years. So if I sell after the renter is moved I will ge the equity out (and any principal repayment on the mortgage the renter paid for). The financing part:
Total investment 71.500,=
Mortgage 50.000,= => 300,=/month (@6%, 30yr)
=> 0 (initial) CASHFLOW
Downpayment 21.500,=

What do you think about this? I feel a bit mixed because my lessons 2 & 3 seem to be conflicting.....

Any thought very much appreciated (Oh, conservative estimate above, no appreciations...)

Greetz, Raymond

Hello all,

I"m pleased to announce myself as a new member on the forum!

Happy investing, cheerz,

Raymond