All Forum Posts by: Greg C.

Life lesson learned this weekend...  When ordering books on Amazon... read the description... Apparently there are mini versions...  Here I am reading my brand spanking new Hard Cover copy of Rich Dad Poor Dad :-)

Early on in researching I remember reading...

"I like single level Multi Units... Because water travels down..."  I can't remember the source but it stuck with me

Going to just keep adding notes I have already taken...

CapEx - "Capital Expenditures are those expensive “big ticket” items that need to be replaced every so often, but not every month or year. This could include roofs, appliances, driveways, plumbing systems, or any other large item you should budget for but that do not occur enough to be easily accounted for.” Brandon Turner BP

Cap Rate - The capitalization rate is the ratio of Net Operating Income (NOI) to property asset value. So, for example, if a property was listed for $1,000,000 and generated an NOI of $100,000, then the cap rate would be $100,000/$1,000,000, or 10%.

PITI - "Monthly Payment of Principal, Interest, Taxes and Insurance.” Wikipedia

GRM - Gross Rent Multiplayer - "number of years the property would take to pay for itself in gross received rent. For the investor looking to purchase, a higher GRM (perhaps over 12) is a poorer opportunity, whereas a lower one (perhaps under 8) is better." Wikipedia

Example; $200,000 Sale Price / $20,000 gross annual rental income = 10

As I'm researching and reading and google searching and listening... I'm learning.

I just wanted to use this space to note things I learn as I learn them.  I have absorb so much in the past month.  Not looking for a lot of commentary but maybe you learned something useful today also..

(DSCR) - "Typically, most commercial banks require the ratio of 1.15–1.35 times (net operating income or NOI / annual debt service) to ensure cash flow sufficient to cover loan payments is available on an ongoing basis." Wikipedia

DSCR = Net Operating Income / Total Debt Service

Simple example: NOI 100,000 / TDS 65,000 = 1.5%

@Ryan York tagging so you see reply

Thanks.  I know the home well.  It's my sisters ;-)  After a I ran the numbers it doesn't work great for me. It would see cash flow but it is dependent on the boat slips which I was hoping would run more of as a bonus.  Because I'm way out of town I would need PM so maybe it would work for someone local that runs their own PM.  

Boat Slip home

Thanks

@Ryan York

I'm really just getting going research and planning as an REI and my goal was to start with Multifamily but a SFR has come up to me in Harrison Township, MI. What I find interesting about the property is that it is on Clinton RIver really close to the outlet on Lake St Clair and it has 8 boat slips that come with that rent for an average total of $4000 annually. I'm originally from Sterling heights but have been in Cali for the last 20 years. So I'm not real familiar with the area.

Is it a good place for a Rental.  Is there industry there.  All I can see so far is Selfridge Airfare base just north of the home. 

Okay random "I'm I must be my Dad" question.... What are the Votes on the Post thing about?

---Edit --- Never mind I used that fandagled "search" function and figure it out.

Thanks... Thought I went un-noticed.

Ran the numbers on renting my own house out and using an HELOC to leverage a new Home in CA and with a 10 year pay off on the HELOC I would be at break even before any CapX and Vacancy so that's not going to work. 10 Years interest only would give me wiggle room but who knows what Interest rates would be after the draw period ends.

Next research will be

Sell and take Equity I have and use part for a new down on my primary and part for an REI. (Avoiding CGT anyway.) But it doesn't leave much for me to play with in a SO Cal investment.

Or stay where I am and use HELOC to start with something out of town. Just not sure where yet. This might be the best bet since cost are so high in So Cal I would likely need move to a home half the size but for twice the cost.

Ideally I could start with a 4 flex somewhere.

There is a wealth of knowledge here.  Happy to have stumbled across this site.