All Forum Posts by: David Katz

Thats pretty much what I figured.  Seemed like the logical route to take 1.662 points for .875% reduction.  Given that this is a long-term buy and hold turnkey (which is fully renovated on all fronts and like new), a 2.6 year breakeven seemed like nothing.

I am about to purchase my 2nd turnkey property from Memphis Invest since 1st one has turned out great so far. As with first property, the plan is to buy and hold for the long term, and to create income streams that I can take advantage of many years in the future when the mortgages are paid off.

Mortgage amount with 25% down will be 119,925, and the regular mortgage rate I was quoted by my preferred lender is 4.875%. I also have the option to buy down the rate to 4% with 1.662 points. Thus, for $1,993 at the present, I can lower the monthly mortgage payment by $62. The breakeven would be about 2.66 years. Given that I plan to hold long term, sounds like this would save me a ton in interest over the life of the mortgage and would provide a huge return on the $1,993 investment.

Curious to hear thoughts from others. Any reason why I shouldn't take that buydown option and get the mortgage at 4%, assuming I have no issue paying the $1,993 at the present?

I am about to purchase my 2nd turnkey property from Memphis Invest since 1st one has turned out great so far.  As with first property, the plan is to buy and hold for the long term, and to create income streams that I can take advantage of many years in the future when the mortgages are paid off.

Mortgage amount with 25% down will be 119,925, and the regular mortgage rate I was quoted by my preferred lender is 4.875%.  I also have the option to buy down the rate to 4% with 1.662 points.  Thus, for $1,993 at the present, I can lower the monthly mortgage payment by $62.  The breakeven would be about 2.66 years.  Given that I plan to hold long term, sounds like this would save me a ton in interest over the life of the mortgage and would provide a huge return on the $1,993 investment.

Curious to hear thoughts from others.  Any reason why I shouldn't take that buydown option and get the mortgage at 4%, assuming I have no issue paying the $1,993 at the present?

Recently purchased my first turnkey rental and started making payments on the mortgage.  Mortgage is about $134,000 at a rate of 4.875%.  The property has a positive monthly cashflow of about $300 before factoring in vacancy, maintenance, and capex.  

Do folks who own turnkey rentals with positive cashflow tend to pay down the principal on an accelerated schedule?   Is it all just a question of whether I can get higher than a 4.875% rate of return in the market?  Or is it a matter of finding a middleground where you can accelerate the paydown, but still retain enough leverage to buy your next property?

Very odd that its two separate deadbeat tenant issues.  One can be an anomaly, but two starts to becoming much more concerning.  Without knowing more, I would assuming that either the tenant screening process needs some fixing, or you are buying in a property class that seems to be attracting the type of tenant where problems arise often regardless of how hard you screen 

 The Memphis Invest pro formas use the BP calculator I believe.  Sounds like there is an error in the coding, but should be very easy to fix.  I manipulated and changed up the Memphis Invest pro forma easily when assessing various properties, and if any cell or portion of the chart isn't doing what its supposed to be doing, should be easy to just pop in the right formula if anything is messed up for some reason (though they were fine when I was reviewing them 2-3 months ago).

 Please keep us updated.  I also purchased 1st property with Memphis Invest, and everything has been great so far.  Not sure I want to take any risks in going with anyone else.  So please let us know how your purchase with Bridge goes and how it compares to MI.  

 Something like 56% of Memphis households are renters, which is among the highest rates in the nation.  And that number has steadily increased over the past 10 years or so.  One of the main reasons Memphis is such a hotbed for TK companies

Did 25% down.  After mortgage, tax, and insurance, it cashflows about $285 per month.  of course, have to account for maintenance and vacancy, but average length of tenant stay for MI is nearly 5 years (plus I picked a property in a great area that would rent out fast).  And maintenance should be very minimal in first few years because of how extensive the rehab was.  Its the rehab quality and property management that help ensure a safe and steady cashflow.  Of course, its not going to be the crazy high returns you could get with the higher-risk turnkey properties that some companies sell.  But I always prefer to go safer, more conservative, and with the longer-term picture in mind.

 I'm not OP, but just recently closed on a property with them where the purchase price was $179,900.  They do initial tenant leases of 2 years, so the monthly rent in year 1 is $1,350, and the rent year 2 will be $1,400.