All Forum Posts by: Joe Pearson

So, color me confused. For example, a duplex in Manchester, NH could go for $210k and both units could be rented for a total of $2,400 per month. That means the NOI could be $1,119.67, Cap Rate of 0.533 % and Cash Flow of -$99.33.... Here's the per month numbers I'm looking at with an FHA Loan for 30 years & 3.5% down payment at 4.85% interest:

Expenses:

• Taxes: $391.67
• Homeowners Insurance: $66.67
• PMI: $150
• Vacancy (5%): $120
• Repairs (5%): $120
• CapEx (8%): $192
• Property Management (10%): $240
• Mortgage: $1,219
• (Tenants would pay for utilities)

And... like, this isn't even accounting for Lawn care or Snow removal...

Total Expenses: 2,499.33

NOI = $2,400 - $1,280.33 = $1,119.67

Cap Rate = $1,119.67 / $210,000 = 0.533%

Also, for the 1%, 2%, or 3% rule this comes in at 1.143% = $2,400 / $210,000

So, this is being generous, really. $210k is on the lower side and I'm assuming I'll take care of the lawn/snow.

I'm most confused at how this can really change in any one direction to make it meet the 8% cap rate or the 2% or 3% rule... like the only way I can see it meeting those is by jacking up rent or getting the house for free by a family member. *slams head on desk*

-Joe

@Sarah Karakaian, Would you ever recommend a wanna-be-newbie-handyman-landlord to do that? (Wow, that was a mouthful!)

Thanks!

-Joe

@Andrew Postell, How long do we need to stay in the property for?

Does that change depending on what type of FHA Loan we go with? 203k, HomeFlex Cash Assistance (I believe this is NH specific)?

-Joe

@Matt Herbert, My biggest fear at the moment is whether or not I can afford to buy a house now. I just need to read Brandon's book on no or low money down investing. 

Can we get those legal documents just from Googling? 

I actually just bought that bundle last weekend =)

@Parker Fairfield, I'm only interested in residential properties at the moment, but, we'll see if that changes over time. OOOooo, that top reason peaks my interest, tho, would you want to save the RE AGENT FEE to just record it for your own records? I'd be more curious what it was sold for, then I could also compare that to the gis.vgsi.com/manchesternh site. Very useful other points, but, that sounds like it should be paid for, no?

-Joe

@Parker Fairfield, Here's some of the websites I tend to navigate: biggerpockets, realtor, trulia, gis.vgsi.com/manchesternh, addons.nashuanh.gov, neren, crimemapping, nhdeeds, axisgis.com/DeeringNH/, reddit, youtube

@Lucas Knowles, I really feel as though I should spend at least the same amount of time as you learning, which is one of the big things holding me back from buying anytime this year. I did attend the NHREIA meeting this week and it went quite well! Better than I expected, which was to be overwhelmed by people who were millions of dollars into real estate.

-Joe

@Parker Fairfield, We certainly could make a Google Drive or Dropbox or other spread, I'd just get worried it would become very opinionated, bulky and a timehog. I'll make another reply later when I'm on my personal computer with my bookmarks. Yeah, my dog's anxiety is something we are constantly working on. I get charged $50 per month for having 1 dog, so I'll continue something like that. 

I am very concerned about sound transmissions thru drywall, or rather the STC rating, but it's not a matter of how to deafen sound transmissions more so than what is already there, because I obviously do not want to tear down the walls. I guess my only real point of reference is if any current tenants have dogs or children and to hope for the best.

I feel like you copy-paste that everywhere as your "signature" ... I haven't bought the BP membership, yet.

@Mary D., The rental calculator is the biggest pull to get the membership, but really I only want the membership until I get my first place, then I want a refund for the remainder amount of the membership, which I'm assuming I can't get.

@Chris Luksha, I was actually fumbling around with some of the bugs on the nhreia.com website, so I ended up simply Googling to figure out about non-members and exactly where it was.

-Joe

Holy crap, that's alot of feedback! Thank you, everyone!! I will respond in more detail soon. 

I did attend the NHREIA today and it was phenomenal and i was definitely engulfed in fear, so i didn't say anything about me looking to buy. But, i did stay until 9:45 talking to an awesome landlord. 

-Joe

Mary, CoC ROI, like what Brandon talks about with his 4 square method for calculating rentals? BP Podcasts 157 & 184? Rich Dad, Poor Dad definitely seems to be a strong favorite around here. I'll check them out soon!

Dieggo, I'm planning on going!

Chris, I don't have discriminatory attitudes towards anyone. Definitely good to know that I can decide that.

Thank you, all!!

Will & Chris,

Thank you! I tend to get wrapped around the axle about what-if questions and knowing neither of you thought having dogs in a duplex would be bad eases my concerns. 

Also, even if the worst case scenario happens and I get a really bad house I can always fall back to living with the in-laws who are nearby, they have the room and they'd take us in, in a heartbeat. 

-Joe