All Forum Posts by: Yuriy B.

 Thanks for the response James. Its great to hear advise from someone so close and who has experience in this area!. I did not think that it would be that difficult to rent out that property, since 8 minutes from the commons seems pretty close. Thank you for steering me in the right direction. The problem is that from my research over the past two months I have not been able to find properties in good shape that are under 150k in downtown Ithaca. I just figured a little further from the commons would mean homes cost less and rents should be a couple hundred less. My thinking is that if the price is right almost any house will rent out. How much do you think a landlord would be able to charge for a property like this?. Would it be possible to rent this house for something like $1100-$1200?. I feel that even though the cash flow is lower the investment for this property would be around $30-50k less than a similar property downtown.What kind of cash flow should I expect if I invest in a  3 bedroom $150k property downtown?. Can you tell me how you started out investing?. I am new to  real estate and would love some more guidance on how to get started in Ithaca. Thank you again!

@Justin Escajeda It looks like you are getting great returns on your duplexes. One more question for you. Are late payments an issue that is going to come up very often. I assume this would be a bigger problem when renting to low income/lower end units. Thanks.

 You are correct that 30 years is the better loan term. I was thinking that If I financed for a shorter term I would be more focused in paying off the investment faster. After reading your post it makes sense to do a longer loan since that option does exist where I can pay down the loan sooner. 

I dont plan in living in the property, because of this I believe I will not be able to do conventional or FHA financing. It looks like all I can do is wait and save for the 20% or higher down-payment.

I would like to learn how to be more handy with home repairs and perhaps through rental properties I will gain skills in this area. Thank you for all of the advise and good luck with your investing!

 Thank you for the response!. I do agree that rates will have to rise soon. I appreciate the advice and good luck with your investing. 

Hello Justin,

I really appreciate your advice!. I am targeting families, at first I was undecided but after some analysis I decided that the higher revenues from renting to students would be offset by higher vacancy rates.  Your advice about repairs caused by students has convinced me that , perhaps later when I get more experienced with rental units I will try my luck in student housing.  Can you tell me what is most daunting about self managing your own rentals?. What is a typical day like running a business like this?. 

My biggest problem is that I am not very handy and I have almost no experience in fixing homes. I hope I would be able to find an independent contractor who would charge reasonable rates when things go bad. I don't know what types of repairs to expect and how much this would eat away from my cash flow.  

4-5k is what I think I will make from a property like this per year. I have been browsing the craigslist in Ithaca and I have not been able to find any housing in good condition under 100k. I believe the large student population drives the home prices up, but rental charges are higher. So it seems like its a zero sum game. I will continue researching for good deals on properties but I dont expect to be able to find an investment that gives me more than 5k in cash flow in this area. Even though the cash flow in my local area is probably less than in other places I want to start investing locally. What type of cash flow do you aim for?. Thank you for all of the great advice you provided!. Now I feel like I am better prepared to get a good return on my first investment. 

 Thanks and I look forward to gaining enough knowledge to make a great first investment!

 Thank you for the advice!. I listed closing costs of 0 since I assumed I would be able to negotiate on the property and that would make up for the closing costs. I should have put a number down to make it more clear for the readers. Ithaca does seem like a great place to invest, but a big problem is the high property taxes. I do agree that one of the best things to do is to negotiate really well. Can you explain to me what a soft market is?. Also do you have a preference as to investing in the syracuse university area or in Ithaca?. I was reading an article online that talked about how syracuse can provide great returns for rental property investors since home prices are fairly low and rent prices are good. Thanks.

I have recently graduated college and thanks to to all of the great people on here I am convinced real estate is the answer to a better life for me, meaning I could live comfortably from rental income when I have around 10 properties. I would like to start out by purchasing a single family home in the 100k-120k price range. As of now I am trying to save around $20k for a down-payment on a house in this price range. I am 25% of the way there and I feel that in a year I will have saved enough to place a down-payment. I have found a 3 bedroom home which is about 8 minutes from Cornell University and close to other schools. The seller is asking for $110k. I dont know the condition of the house but from the pictures it looks like it is in good condition. Three bedrooms homes rent for around $1500 a month in Ithaca, so that is the number I think I will be able to rent it out for. Because of a very large college student population the area has a vacancy rate of close to 0%. Below are some numbers I quickly estimated to see if this is a good investment. I realize that the property is going to be sold by the time I have enough saved to put a down-payment but I am just doing my research for now and trying to become good at analysis.  What do you guys think?. Is this a good investment?. Also is it accurate to assume that as a first time home buyer I will need to put down 20%?. I wish i could provide more information, but this is all I have as of now. Thank you all and I look forward to getting advice on this investment and any type of rental property advice!

Residential Income Property Analysis

Property Assumptions

Purchase Price$110,000

Down Payment$22,000

Loan Term15 Years

Interest Rate4.00%

Principal & Interest Payment$651

Closing Costs$0

Gross Scheduled Income (GSI)$18,000

Vacancy Rate7.00%

Number of Units1

Pro-forma Income Statement & Cash Flow

Gross Scheduled Income (GSI)$18,000

Less Vacancy$1,260

Total Actual Annual Income$16,740

Other Income (Laundry, Late Fees, etc.)$0

Gross Operating Income (GOI)$16,740

Annual Opertating Expenses

Accounting$300

Admin/Bank Charges$0

Advertising$0

Electricity$0

Elevator$0

Gas$0

Landscaping$0

Legal$200

Maintenance & Repair$2,000

Payroll taxes$0

Permits and licenses$0

Pest control$0

Pool$0

Property Insurance$440

Property Management$0

Real Estate Taxes$3,850

Security$0

Telephone$0

undefined$0

Tenant buyout$0

Trash$0

Water$0

Other$0

Other$0

Total Operating Expenses$6,790

Net Operating Income (NOI)$9,950

Annual Debt Service (mortgage payments)$7,811

Before Tax Cash Flows (BTCF)$2,139

Key Operating Ratios

Capitalization Rate9.05%

Cash on Cash (COC)9.72%

Gross Rent Mulitplier (GRM)6.11

Net Income Mulitplier (NIM)11.06

Debt Coverage Ratio (DCR)1.27

Expense Ratio (ER) Per Unit40.56%

Price Per Unit$110,000

Here is a link to the property:

https://ithaca.craigslist.org/reo/4827978957.html

I have recently graduated college and thanks to to all of the great people on here I am convinced real estate is the answer to a better life for me, meaning I could live comfortably from rental income when I have around 10 properties. I would like to start out by purchasing a single family home in the 100k-120k price range. As of now I am trying to save around $20k for a down-payment on a house in this price range. I am 25% of the way there and I feel that in a year I will have saved enough to place a down-payment. I have found a 3 bedroom home which is about 8 minutes from Cornell University and close to other schools. The seller is asking for $110k. I dont know the condition of the house but from the pictures it looks like it is in good condition. Three bedrooms homes rent for around $1500 a month in Ithaca, so that is the number I think I will be able to rent it out for. Because of a very large college student population the area has a vacancy rate of close to 0%. Below are some numbers I quickly estimated to see if this is a good investment. I realize that the property is going to be sold by the time I have enough saved to put a down-payment but I am just doing my research for now and trying to become good at analysis.  What do you guys think?. Is this a good investment?. Also is it accurate to assume that as a first time home buyer I will need to put down 20%?. I wish i could provide more information, but this is all I have as of now. Thank you all and I look forward to getting advice on this investment and any type of rental property advice!

Residential Income Property Analysis

Property Assumptions

Purchase Price$110,000

Down Payment$22,000

Loan Term15 Years

Interest Rate4.00%

Principal & Interest Payment$651

Closing Costs$0

Gross Scheduled Income (GSI)$18,000

Vacancy Rate7.00%

Number of Units1

Pro-forma Income Statement & Cash Flow

Gross Scheduled Income (GSI)$18,000

Less Vacancy$1,260

Total Actual Annual Income$16,740

Other Income (Laundry, Late Fees, etc.)$0

Gross Operating Income (GOI)$16,740

Annual Opertating Expenses

Accounting$300

Admin/Bank Charges$0

Advertising$0

Electricity$0

Elevator$0

Gas$0

Landscaping$0

Legal$200

Maintenance & Repair$2,000

Payroll taxes$0

Permits and licenses$0

Pest control$0

Pool$0

Property Insurance$440

Property Management$0

Real Estate Taxes$3,850

Security$0

Telephone$0

undefined$0

Tenant buyout$0

Trash$0

Water$0

Other$0

Other$0

Total Operating Expenses$6,790

Net Operating Income (NOI)$9,950

Annual Debt Service (mortgage payments)$7,811

Before Tax Cash Flows (BTCF)$2,139

Key Operating Ratios

Capitalization Rate9.05%

Cash on Cash (COC)9.72%

Gross Rent Mulitplier (GRM)6.11

Net Income Mulitplier (NIM)11.06

Debt Coverage Ratio (DCR)1.27

Expense Ratio (ER) Per Unit40.56%

Price Per Unit$110,000

Here is a link to the property:

https://ithaca.craigslist.org/reo/4827978957.html