All Forum Posts by: Federico Cantero

Justin. Thanks. Te operations are not SFR. This is a brand new house.

-- What is causing the numbers to get "better"

In my assumption for the first year of cashflow, y plotted in on the  expenses the cost of the legal elements required to transfer the property to me from actual owner, and as Susy is mentioning on the next post from you, the properties are in Central México. Things do not operate similar a sin the US, but this is a fairly regulated transaction between bank, public notary, owner and buyer. Im assuming as expense Legal transfer, Furniture for all house and payment to broker that got the tenant. So the first year ROI and CAP Rat are negative, once we cross to the second year and this cost is not part of the cash flow, rates  get positive.

Bill. Tanks. Is a brand new, brick and concert house so no repairs in the short run. It will have a tenant in 3 more weeks. Financed at 75% with the bank.

Thanks once more. In deed this is a long run plan .

Thanks Jay. In deed is a high rent high appreciation area so your comment is a grate one to consider. Thanks

Good morning to all.

Im a newbe and Im struggling to make a decision over 3 Rental deals that I have on sight at the moment. The issue is the result on the rates Im getting for the first year of cash flow.

Two of the 3 properties have Negative ROI, Negative Cash ROI and a CAP rate below the Interest rate of the loan on the fisrt year of cahs flow. According to the info I have seen on BP and even the Podcasts, discussion always centers on the results you get from the First year cash flow analysis.

But turns out that on the second year numbers for this two properties become positive and even close to expected returns. For the third year, all numbers are OK.

So Im struggling with the decision, because everyone speaks so much over the Rates and the numbers you should get, but I have not heard anyone say, I will sit on it one year because this si a good deal once a year has passed.(or two or three)

So in general my question is:

To make a decision over investment to buy and rent a single unit, I must focus on the results Im getting only on the first year of cash flow, or the long run is a valid way to analyse the deal as well?

If long run analysis is valid, time wise, what would be a normal, standard, time to see a project turn in to the positive side?

At the end of the day my Business Plan is Rentals and Passive income, so Im willing to sit on the properties for some time.

Please, help, someone that has experience making decisions over longer periods than one year cash flow.

My absolute thanks in advance for your comments and suggestions.

Luis.

Thanks for Connecting. Good luck in this first operation.. As well I just got my first apartment buy and hold. The interest rate im getting is 8.70% from BBVA at a 20 year Mortgage, the good thing is that the apartment has client already so I only put a downpayment of 25%.  For the regular operations of purchase and hold Im using the Excel file described on the EDUCATION section of the page with the Title "Ultimate Beginner's Guide" I made the excel from scratch following up the examples and helped me understand the maths behind very well.  

Tim.

Many thanks for sharing this simple rule. In fact from the time I posted to today I got my first Buy and Hold/rent with tenant included. But for the full greenfield I will purchase from a company that develops from ground up and Manages as well, including finding tenants. So I will treat this operation as a regular Purchase of house with mortgage included, freeing myself from the building process. 

Thanks

God night to all. My name is Federico and Im starting on the Real Estate business down in Central Mexico. In this country, as you can imagine the RE business is a hole different animal that in the USA but numbers needed are similar. I have some relative experience on purchasing with bank loan and tenting properties. So far 4 units. But im getting in to buying land, building, financing and renting and I need some advise or Excel sheet to analyze something like this to get to some some level of analysis. Can some one share rule of thumb over this type of deals. In return Im more than glad to give some market info on the booming Realestate sector in Central Mexico if anyone is interested. My best regards