All Forum Posts by: Jeff Fisher

Quick bump for additional advice. As this would be my first rental I am more interested in having a safer rental: nicer house in a good rental area with little rehab to begin then making 100+ cash flow.

Seems like majority of investors want $100+ per side but I am fine with settling for $50 and gaining experience as I would be managing the property. I have substituted 15% for repairs & cap ex. Any other adjustments that should be made to my estimates?

Thanks for the input.

Jeff S. so as a gauge you would put capital expenditures at 15% of gross rent? Previously I just used 2.5% * the sales price which was a pure guesstimate. I tend to over estimate to be cautious. This would potentially increase cash flow to 48 per month per side.

Does it appear all of the other estimates are in line? Per your spreadsheet you have a much lower vacancy rate (impressive) and don't include Property Management. I include PM because it is an active investment even though most of that money should be staying in my pocket. Are there any other variables a I should be taking in account?

Hello,

I am looking to purchase my first owner occupied self managed duplex (2/2) in Western New York (North Buffalo). I wanted to get some feedback regarding my analysis of a property and the 50% rule due to high property taxes. It is an older house (1920s) in a more trendy/ popular area. The eventual plan is to move out and buy more properties so the calculations reflect a 100% tenant occupied property.

I am not looking to become rich off this property but would like to know I wont likely lose my shirt. At this point I am just as interested in the social aspect (time spent/headaches) of being a landlord and how it will mesh with my day job. Although I am not handy at all I am more than willing to handle regular maintenance.

Sale Price: 100,000 (prices between $90k & $110k in rentable condition)
% down: 20% @ 3.75% (pre approved)
Rents: $625 each (+/- $25)

50% Rule= $15,000 (Rental Income) - $7500 (50% rule)- $370 (Debt Service)= $127 per month per side

My Analysis = $15,000 (Rental Income) - $9665 (Operating Expenses)- $370 (Debt Service)= $37 per month per side

Maintenance (2.5% of Sale Price) $2,500.00
Taxes (Estimated) $2,500.00
Insurance (Estimated) $750.00
Vacancy (8.5%) $1,275.00
Property Management (10%) $1,500.00
Utilities (Water & Sewer Estimated) $840.00
Other (Long Term Maintenance) $300.00

My questions:

- Does the 50% hold water in my area and particular situation (older house) and high taxes?

- Are my estimated costs too high/low or flaws with my calculations?

- What would you expect to cash flow/ would you be interested in this property?

- Do you feel the big ticket items (replacing roof, siding, furnace, remodeling, & etc.) are built into the 50% rule or the 2.5 % maintenance I calculated?

Any and all input is appreciated.

Thanks.