All Forum Posts by: Eugene Harris

@Jeremy Walmsley I used the PITI calculator and I was told that it includes it in the total PITI. The property tax history states that in 2014 taxes were at $7,232. Should I double check and make sure taxes are included? As or the 30k in repairs, I was going to use the FHA 203k loan that provides the funds for the repairs.

@Alexander FeliceThanks Alexander for your advice, do you think I should include more expenses? I know some people include garbage, flood insurance, water, etc. with their expenses but some do not.  As far as closing cost, what do you think is the best way to get an exact number, simply through the seller? Thanks again!

@Peter Tverdov Thanks for your input, currently I'm just running numbers so I'm not giving an offer on this particular duplex but thanks for your advice I will surely be on the look out for a greater Cash on Cash percentage! 

@Ryan Dossey Thanks for the reply! The two buddies are both in college still so they will be in and out of the house so it should work just fine (hopefully).

Hello everyone, just recently I have been playing around with numbers to get comfortable with analyzing deals before I jump into the real estate investing game. God willing, I'm going to buy my first property within the next few months by using a FHA loan. I found a few duplexes but again, these are just to test out numbers and see what mistakes I'm making so that I can fix them and improve my analyzing skills. Please give some advice on what I'm doing wrong or right, I would really appreciate it.

Practice #1

Duplex

-Purchase Price- $150,000

-Closing Cost- $5,000 (I always use 5,000 in my examples just to be safe.)

-Estimated Repair Cost- $30,000

-Total Amount (excluding closing)- $155,000

-Down payment- $5,250 (FHA 3.5%)

-Interest on loan- 5%

Monthly Income

$2,500 (That’s what is currently being charged to tenant)

Monthly Expenses

P&I- $1,379

Vancancy Rate (10%)- $250

Repairs (10%)- $250

CapEX (5%)- $125

Property Management( 10%)- $250 (Not sure if I need to include this because I will be living there on the other side)

Insurance- $200 (Not sure how to know the exact number for insurance so this number isn’t accurate. Too much or not enough?)

Total: $2,454

Total Monthly Profit- $46

In this particular duplex I’m running numbers on are both 3 bed room 2 bath on each side. I’m 22 years old with no wife or kids so I would have two extra bedrooms I will most likely rent out to friends for maybe $250-$300 a room which can boost my monthly profit up to approx $646.

Cash on Cash- 5.39% (I did $46 (monthly income) x 12 then divided that by $10,250 which is down payment and closing cost and ended up with 0.05385) correct?

As you can see I'm a bit stuck on how to find the exact number for insurance. I have been trying and trying to find a way to get the exact number or at least closest to it but I'm still having a hard time but I'm still researching the best ways to do so at the moment. For the mortgage and taxes I use an online calculator that fins the PITI.

Are there any other factors I have to add in that will be charged to me down the road? Also how would you calculate garbage, water, etc. if I were to add it to my analysis?

Please review my analysis and let me know if I’m missing anything that I should be calculating or if my numbers are way off on any of the costs. Thank you in advance! I know I need to keep practicing but I don’t want to practice over and over with the wrong technique so its best if I correct it now and continue to practice the correct way in the future.

Thanks Anthony, will definitely look into it and see what it has to offer.

Thanks Shamus for the reply, I'm located in Monmouth County at the moment.

Hello everyone in the BP community, hope all is well with you all.  My name is Eugene Harris and I've been on BP site for a few months now and recently registered as a member about a month or two ago. I created my first forum post and received a lot of feedback and that really made me happy and thankful to know that there are people who are willing to give their advice and input regardless of how successful they are.  So again, thank you for all of the replies and warm welcomes everyone has given me.  Since then I've continued doing some research on real estate investing and just finished up Brandon Turner's book on Investing in Real Estate with No and Low Money Down.  It was a wonderful book and I've learned so many ways on how to be creative and invest in real estate.  

Now it's time to go ahead and jump in! I don't want to be that individual who reads ands reads daily about real estate investing but never jump in and try to do it. With that being said, I have came up with a starter plan where I think it's the best starting point for me before moving on to rehabbing and flipping properties. I would like to start with an owner occupied investment property. I want to find and purchase a duplex using a FHA loan and live in it while fixing it up and renting out the other side. With me being only 22 years old with no wife or kids, I feel like this would be a perfect starting point.

The problem/situation I'm dealing with at the moment is the numbers and analyzing the property.  I've read a lot and studied a lot to know that this real estate business is not easy and you can make a lot of mistakes if your numbers are not accurate.  So I can honestly admit that I'm stuck on the numbers and don't have a system in place at the moment where I could plug in numbers to determine the cash flow I would be receiving.  I know the basics such as first looking at the price of property, taxes and insurance, mortgage, monthly income from tenant next door. Are there any other factors I must include? So far, these are the questions I have for myself at the moment:

What factors must you include in your mathematical system?

How to estimate expenses on a rental property?

Best method for finding and analyzing properties?

What makes this is really a good deal?

These were the first four questions I came up with once I decided that I wanted to take the Owner Occupied route.  Please feel free to add in some questions I must ask myself and also any advice on what you would do if you were in my shoes.  Again, I am a complete newbie to real estate investing as you can see, but I am also a believer and I believe that I will become successful in this business down the road.  I love reading about real estate investing and I am determined to become great at it and make it my full time job, with proper guidance I know this dream can come true.  Please feel free to contact me at anytime, I'm always interested in discussing real estate investments and opportunities. Thank you all in advance and I apologize for the long post.

Thank you all for given me a warm welcome! I appreciate all the advice each of you have given me and I hope to stay in contact with you all, enjoy the rest of your weekend!

Eugene

Hello everyone, my name is Eugene Harris and I've been scoping out BP for a few months now and finally decided to make an account. I am a recent college grad (May 2014) with a degree in Public Administration. I am looking to join the real estate investing business. Are there any meet ups or any type of seminars located in New Jersey that can help me get started? I have purchased two books and learned a lot from them and still seek new information daily, but now is the time to talk to someone with the experience! Please let me know, thanks in advance.