All Forum Posts by: Brad Fry

I am in Arizona and am doing due diligence here... I have portfolio of SF rentals that net about 12.5% annually..I am thinking about dumping them and building an Rv/boat storage facility on a 7 acre piece of land. Does anyone have any number to share about COC returns for this facility's that have been recently built n the past 5 years or so?

Thank you all for the responses,  I will try to address all questions below.

This would be a net 12.8% COC (tax liability after depreciation not taken into account) return including all expenses, vacancies, maintenance...if the property was paid off today

The property could probably have the rent increased a max of $50 a month.  It is at close to current market rental rates.

-$421 per month is negative cash flow

property has about 85K in equity and is gaining about $700 a month in equity with the payment as well. yes refi to a 30 yr conventional is an option

This is my only alligator in the portfolio the rest of the hold properties are structured correctly, positive cash flow.

I am hearing keep the money loaned out at 16%...Please let me know if this above info stems any other input...It is just hard to see a property not producing a positive cash flow and waiting for the gain to occur once the property is paid off with OPM...and partially mine down the road in 7 years. thanks you

Hi I have a small portfolio of rental properties and notes and have a debate I am having with myself and wondering if anyone with experience in this area can shed some different light on the scenario.

I am debating on paying off a property that has a 15 year note, 5% rate (will be paid off in 7yrs).  My cash flow is negative -$421.41 on this property. principle balance is $90k. is rented with a long term tenant.

I am thinking of paying the mortgage off.  This would equal a 12.8% COC (962.67 per month after rental property expenses) return on the 90K.

Opportunity Cost: I also have opportunities to loan funds out at 16% to flippers, so I can use the 90K for that and generate $1200.00 a month

I am trying to factor in all elements and variables. Off the top the 12.8% return is guaranteed, and I have to keep turning the 16% money.  The 16% money will generate more cash flow.  I have a tax write off with the interest from the mortgage if I don't pay it off.  I can always refi and pull the money out again(pain in the butt) to loan.  Does any one have experience here where they would like to share?   Thank you for your time.

Thanks for the input.  It sounds like if we start increasing rents and or deposits based on the tenants qualification we need to have a clear criteria documented on how we established the increase and keep it consistent for all applicants across the board. CYA

I have had a few applicants for one of my rental properties that are in my B rate qualifications box.  Is it legal to offer the property for rent to a potential tenant but raise the rent from what I had originally advertised the property for?

thanks.

Good to hear Aly

I just purchased QB 2014 Pro and Landlord accounting to help me set it up myself...I hope my learning curve isn't too steep. Chart of accounts and set up here I come!

Is the landlord accounting a add on? I am told to use classes for the properties and get the right chart of accounts set up.

I have only 7 properties and want to start doing my book keeping in house. I am currently using excel sheets to track all revenue and expenses. I am send the information over to the book keeper that is preparing P&L and Balance sheets for my CPA...It seems that I am still doing a lot of the work myself, from tenant set up to paying invoices to having to clarify what expense went to which property. What is the best software for my need? thanks!

I have funded a couple HML deals here in AZ. I am looking to get more involved in short term and midterm lending. I am told that if I am not licensed to do loans that I can only do 5 deals annually. Can someone validate this or give opposing information? Also ,I am told if I am not advertising and working with a select few investors that I should not have to worry about being a broker? Can someone weigh in on this also? I want to cover myself legally before I make a hard go as a HML. Thank you for any input or advice.