All Forum Posts by: Eric Gamble

View report

Greetings BP members!  

Any and all input on this 3-unit (1-bed, 1-bath) vacant and distressed property outside one of the Top 5 U.S. Military bases, would be greatly appreciated.

Is this ready to seeks partners?

Project Overview ( - for BP Analysis)

- Rehab Period

  -- Holding Cost: $2,555

  -- Repairs: $72,000

  -- Total Cash Outlay: $87,605

- Initial Rental Period

  -- Gross Income: $1,770

  -- Monthly Expenses: $1,126

  -- NOI: $10,941

  -- Total Cash Needed: $85,050

  -- Cash-on-Cash: 9.09%

  -- Purch. Cap Rate: 29.18%

- After Cash-out Refi

  -- Gross Income: $1,770

  -- Monthly Expenses: $1,599

  -- Monthly Cashflow: $171

*This link comes directly from our calculators, based on information input by the member who posted.

@Kyle Schlosser I agree, a more specific grouping of prospective properties is in order.  And you are correct, the subject properties will be 3-4 bedrooms, 2-2 1/2 baths in certain zip codes and possibly certain subdivisions.

@Joe Villeneuve it seems you are operating in an environment I am moving towards.  When I worked in corporate America I did a great deal of reverse engineering.

@Adrian Stamer I am not attempt to "rock the Rule boat." I understand the rules are for "quick looks." However, with my limited experience, it seems that this rule might be making my thumb "too big" when analyzing SFH where the tenant will more than likely pay for all utilities.

@Ned Carey I was not expecting to press up against, break, or have to abandon a rule so early in my journey. It's a good thing I'm flexible.

Thanks, I needed the "check-up."

 Okay. I will move to do exactly what you said. 

Many thanks,

-Eric

As an REI that primarily buys in cash, would my opportunities be taken seriously if I used and commuicated my 30%-Rule assumption?

I am looking at wholesaling some properties in a highly desireable area.  However, whenever I do my analysis with the 50%-Rule, I cannot get close to a number that would work for all parties.  If I run the same analysis, using a 30%-Rule, I might get EXTREMELY busy (and that is what I want).

The 50%-Rule is a rule of thumb that says take 1/2 of rental income and allocate it to expenses.  This is a very good practice when the landlord is responsible are ALL utilities and the like.  However, with a single-family home, especially in Class-A/B neighborhoods, the tenant covers all of their utilities and as for insurance the landlord probbaly has an umbrella policy on the property.

Many thanks,

-Eric

Hi Doug,

I think I have run into the same issue you might be eluding to.  The metrics used to analysis a rental wholesale deal can be attacked from different perspectives and if the proper perspective is not identified the result could become quite questionable.

@Brandon Turner - Hi Brandon, I'm truly enjoying what I have used and experienced on BP thusfar.  However, I think a potentially serious logic error make be in the Wholesaling Calculator (which is needed and should be maintained).

For example a rental wholesale can be measure by any one of the following:

- Cash-on-Cash (cash purchase)

- Cash-on-Cash (loan purchase)  **note: I have not figured out a logical approach to this one yet

- Cap Rate-with-Purchase (NOI, 50%-Rule for expenses, and market rent [cash purchase])

- Cap Rate-with-Loan (NOI, 50%-Rule for expenses, market rent, Cap Rate, and debt coverage [leveraged purchase])

I have a rudely designed spreadsheet to do all three (3). I will attempt to clean it up and share it in the "cloud" so you and other can critique its output.

Yours in success,

-Eric

@Robert Leonard I have added photos (here is the link to the updated report -

https://www.biggerpockets.com/calculators/shared/1... )

Would truly appreciate your perspective.

The expense for concrete, in the report, is to address the pool deck.  It currently has a artificial turf that faded and torn in places.

Many thanks,

-Eric

I have added image for this opportunity.

Have you pursued any OFF-MARKET potentials?