All Forum Posts by: Danual Berkley

I'm a total newbie here and I've been practicing crunching numbers to decide if a unit is worth it or not. I'm kinda stuck on which is most important to make my decisions on buying or not buying, good ROI or selling without a loss if things go bad? So here's my example below:

Asking price is $44k, being all in at 75% is 39k after rehab. Similar Comps in the area are going for 52k ARV. We settle for 38K minus rehab cost.

Unit rents for $800 p/m

Down payment is $7,600.00, was off on numbers and ended up spending 10k in rehab, so my TI is $17,600.
After expenses cash flow is $231 a month. My ROI is 16%. So in roughly 6 years I'll make my full investment back.

Things go bad and I have to bail after 3 years and the most I can get ARV is 52K. I'm still invested 9k plus let's say 27K still owed on the loan on the unit.

Which is more important, a high ROI or being able to bail out with little to no loss if things go south?

Sorry that is correct.  I meant 5%, 8% etc. 

I'm looking into investing into rental properties and I've been reading a lot about return on investment. What's the average ROI do you look for when making a deal? Is it. 05%, .08%, higher? How do you even decide at all?

I'm looking into investing into rental properties and I've been reading a lot about return on investment. What's the average ROI do you look for when making a deal? Is it. 05%, .08%, higher? How do you even decide at all?

Maybe the best way to handle this situation is by doing month to month leases? That way if they don't pay you can just not renew their lease and they have to leave, right? 

Thank you all for the great advice.  I did not grow up in the hood, but I hung there a lot growing up as a kid because I have family in the area. That particular street is fairly quiet, but the surrounding neighborhood is rough. There's also a high school one block South of this unit and a lot of kids walk past everyday. 

I just started reading on rehab cost. I got my numbers from local estimates here in town. Furnance $3100, water heater $1000, flooring, couple grand, bathroom tub couple grand. 

My buddy does only section 8 and he has a duplex unit a couple blocks from this one as well, and his cash flow per month is $500. All he pays is water and trash, the tenant pays the rest and the section 8 pays the full $500 for both units. He swears this is the best way to go but I've joked many times he's a slum lord because his unit does look ran down, but it cash flows very well. Both tenants have been there since he bought the place 4 years ago. 

I'm looking to buy my first property and from what I read you get the best deals on the fixer uppers. 

I plan to make an offer on the unit listed below.  I will use it as my very first rental property for section 8 housing. It should rent for $750 per month on section 8. 

The unit was broken into earlier this year in February, and needs about 10K in rehab (HWH, furnace, bath tub, paint, flooring). Think I estimated that ok?

The property value may decrease over time. It's in a Class D neighborhood. Its been on the market for 54 days and seller wants 39K. Last sold for 15k in February.  I plan to offer 17k. What are your thoughts? Should I go for it? This is my very first go at it, and worst case scenario I can afford to take a loss.

https://www.zillow.com/homedet...

Thanks John. How did you mention me in your post? Whenever I do the @(name) it never turns blue 

What percentage do you charge for interest? 

What happens if the house floods or burns down and the buyer didn't have insurance?

should I keep "just in case insurance"?

I plan on buying a unit and selling it to someone who has trouble getting a traditional loan by providing owner financing.  

Anyone has any experience with this kind of investing?