All Forum Posts by: Gabriel Krut

Hey all, 

  Does anybody know of somewhere I could look for breakdowns of deals (price, financing info, income, expenses, etc.) to study?

  As I work more on analysis and building my model of what a successful property is for me (an idea lifted from Ep. 343 with @Steve Rozenberg) I was wondering if there are some rental property case studies you could point me to. I understand that every property is different, and that's exactly why I am curious about looking at different examples. Not looking for a single template to hold sacred. 

Thanks!

@Caleb Heimsoth, thank you explaining the difference between maintenance and CapEx. Makes much more sense now.

@Derreck Wells, thank you for the clarification as well. Since I'm in school for the next two years, what sorts of things can I do now to best prepare for owning/managing my first property? Also, is there any way for me to own a property before graduation, or is it best to wait until I have a job, income history, etc?

@Ben Durwood, thanks for the support and hello to another San Diegan! Just had flood warnings here in Indiana, so I'm particularly jealous of home at the moment. I very much appreciate the GR-specific expenses. That is exactly the sort of localized info I'm trying to accrue. I will also keep the utility, lease-finding, and preparation for renting questions in mind in my next analysis.

@Jim K., very much appreciate your thoughtful response! Everything you pointed out about the property makes sense. Even if some of them seem obvious, it is all of these details that I'm working on being aware of as I analyze. Figures about average age of home stock and the idea of a hot local market are also great nuggets of info. 

Again, thank you all so much for your feedback. This post was meant as a sort of check-in on the development of my investment strategy and deal analysis. You all brought the knowledge and experience and made it even more informative than I could've hoped! I used to be upset by the idea of tightening my search criteria, but I've come to understand that it's not about more deals, it's about the right deals. 

Time to get back to work. I'll be back with a new analysis and I look forward to dissecting that one, too.

@Derreck Wells what sorts of misc expenses can I start to think about (that aren't covered by the other categories of maintenance, CapEx, Management)?

Thanks!

@Andrew Gingerich, thanks for the encouraging words. As for vacancy, do people typically budget closer to 10 or 12%? In your experience (I know this is highly variable) what % is reasonable?

@Dennis M., thanks for the feedback. This write-up is less about this particular deal, and more about my analysis framework. Assuming this system is sound, what sorts of returns should I be looking for with duplexes? I've heard everything from $100/unit to $600/duplex as you suggested.

Also! Realize that I didn't put in a specific entry for CapEx. What is a reasonable amount to allot for that, generally speaking? I know it depends on area and current condition, of course.

Hey all,

20 year old Junior in college. Interested in REI and owning rentals. Since I have very little capital and low income, I am planning on partnering with family to buy an out of state duplex. Can you take a look at my numbers below and let me know if these estimates are reasonable? I'm still a ways from buying anything, so this is more of a check if my analysis is headed in the right direction. I try to be as conservative as I can with my estimates (overestimating expenses, underestimating rent, etc).

  I haven't been able to find a lot of in-depth analysis breakdowns, so if anybody has some they'd be willing to share I'd appreciate it! Thanks!

Ex.

1421 Broadway Ave NW Grand Rapids, MI 49504

2 units | 2bd, 1ba each

Listed at 130k. 20% down and a 30yr fixed mortgage at 5.125%

Rent: 1800 (21,600/yr) (900/unit as low estimate from comps and Rentometer etc. Average rent in area is closer to 1100 for 2bd)

---

Mortgage: 566 (6,795/yr) (80% LTV. 5.125% rate)

Property Tax: 185 (2,200/yr) (Found via county records)

Insurance: 83 (1,000/yr) (Another high-ball. Michigan home insurance averages at .63% of property value, so closer to 850)

Maintenance: 216 (2,600/yr) (2% of property value)

Misc: 100 (1,200/yr)

Management 10%: 180 (2,160)

Vacancy 8%: 144 (1,728)

--

Totals:

Income: 1,800 (21,600/yr)

Expenses: -1,474 (17,688/yr)

Cash Flow: 326 (3,912/yr)

  If you waded through all of that: Thank you!! Sorry for the wall of numbers. If you have the time/insight, I would heartily appreciate any feedback, critique, advice, etc. you can provide.

 Best,

   Gabriel

Thanks for your replies, all.

@Caleb Heimsoth, I am from San Diego, family is spread out but mostly in SoCal. The property is ~2 hour drive from school. 

Caleb & @Russell Brazil, your points about being unable to borrow makes sense. 20% seems fair now for a first deal.

@Tim Delaney, As above, I now agree that no additional equity is deserved. As for talking to banks, is there ever a situation in which I would be able to qualify for a mortgage? I have a very strong credit score, but obviously low/no income. 

Hello all!

Background: I am a 20 year old Junior in college (Go Irish!) who wants to get started with REI through rental properties. Thanks to BP's podcast, forums, articles, etc. I have narrowed down a market and established search/analysis criteria. I am fairly confident in these criteria, since every property that my analysis has deemed a deal has been snatched up within days of its listing. I'm now interested in getting involved and am in need of funding.

   Current situation: I have found a duplex in MI that hits my cashflow needs and now am looking for ways to fund its acquisition. My plan was to put some of my savings in and get the rest of the down payment from my family. There lies the rub: how much equity should I get in this deal? From a pure capital perspective, I am putting in ~20% of the down payment. However this doesn't take into account the search, analysis, arrangement of PM, etc. All my family has to do is look at my numbers and agree to chip in.

Thanks for your responses!

(PS: If anybody has advice on financing options as a 20 year old college student, I would heartily appreciate it. My impression is that it is virtually impossible to secure a mortgage since I have no real income.)

If I am purchasing a rental with mostly/all private money, what % of equity should the investor get? I am doing all of the work of finding the deal, arranging a PM etc, and my investor is just supplying the funds for the down payment.

Is there a way to retain some equity in this deal? If so, how much is reasonable?

Thanks!

As I've been browsing the forums, I've seen all sorts of elements of lease agreements that I never would have considered. What are some stipulations you always include in your contracts and how have they covered you?

Thanks all for your replies! If it's alright with all of you, I'll send you private messages to talk further (once I get back from work tonight).

Cheers and thanks for the encouragement!