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All Forum Posts by: Dan H.
Dan H. has started 29 posts and replied 6040 times.
Post: San Diego Short term rentals
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
- Votes 7,115
Quote from @Selina Gruden:
Hi James,
I came across your post and was curious—did you end up moving forward with short-term rentals in San Diego? How has your experience been so far? I’d love to hear how things turned out and if you found a good management solution or cohost!
Selina
We have had STRs in San Diego since 1999. We used to do outstanding.
Currently the city of San diego (not the other cities or the county) has STR quotas but the only area that hit its quota is mission beach.
The last 2 years have been lean. How lean? We plan on returning 2 STR permits because the STR revenue has not exceeded LTR revenue by enough to justify either the additional costs or if self managing the additional effort.
Between the regulations, lean ADR, effort/cost I suspect there are better markets.
Good luck
Post: Would you like a to earn points for every action you take on BiggerPockets?
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
- Votes 7,115
I hope to never have points giver per post. Imagine the $hit posts that would result.
I question the benefit of getting points for using the calculator.
I think the points should reward quality and not quantity. Quality on this forum is indicated by upvotes. Blogs add value as do new threads that achieve a certain level of response.
It likely would not change anything I do on BP. But if I got a free book, discount on my membership, or discount to BPCon for things that I am already doing, I certainly would not complain.
Post: I'm considering employing the Live-In Flip strategy over the next 10 years - Advice?
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
- Votes 7,115
Quote from @Steve Chaparro:
Quote from @Dan H.:
I want to preface I am not a financial advisor, CPA, tax advisor, etc. Check everything with your trusted expert.
I have some questions/comments for you to ponder (no need to answer on BP, just think if they apply to you):
- is your unit that you currently live in rent controlled? How much is it below market rent?
- how much cheaper is it to rent than to live in a purchased property? It is my belief that Los Angeles has large cash flow negative when using accurate expense estimates. How negative is the property's cash flow if using the 50% expense rule. Note at purchase with typical rent to value ratio, the property tax alone is ~20% of rent.
- Is the primary reason for the live in flip 2 year plan to not pay the gains? If so, have you considered 1031 exchange?
- What happens if at 2 years for some reason it does not make sense to sell? What could cause such a situation? Believe it or not the two conditions most likely to result in this is exact opposites. One is that RE prices have fallen to where the profit is poor. The other is prices have risen so much with an associated increase in rents that the prop 13 discount is large.
- Accelerated depreciation is not available on an OO. If you want the quickest tax write off, it is tough to beat. My Net Income Tax Savings using Bonus Depreciation for accelerated depreciation studies competed in 2024 was $256K.
- Your plan has constraint on scaling that does not exist with other options. If a rehab takes 4 months but you have to wait 2 years, that impacts the ability to scale. In addition, you can only OO one property at a time as a primary. That also impacts ability to scale.
Discuss your plan with your trusted financial/tax advisor. There are a lot of options to consider especially if write offs is a primary motivation. Cost segregation, 1031, 2 of 5, standard depreciation, RE professional, STR "loophole", stepped up basis, prop 13 in CA, etc.
Good luck
Hey Dan, I really appreciate your insights—especially around cost structure, tax implications, and scaling. You bring up some great questions that I’ve been weighing as I refine my approach.
I’m working on a two-pronged strategy where I use the Live-In Flip/Live-In Rent model to capture tax-free appreciation on primary residences, while also building long-term cash flow and equity through BRRRR and Build-to-Rent projects.
Your point about scaling constraints is spot on. The live-in flip model naturally slows the pace of acquisitions, so I'm balancing that with a parallel strategy: generating cash flow from an ATM business to fund BRRRR investments, which will later transition into Build-to-Rent.
On the tax side, I’ve been considering 1031s, cost segregation, and STR tax advantages to optimize write-offs. I see the trade-offs between appreciation and depreciation benefits, so I’m evaluating whether holding more rentals makes sense alongside the live-in flip model.
Would love to hear how you’ve balanced appreciation vs. cash flow in your experience—have you leaned toward flipping, holding, or a mix of both?
My market is similar to LA that the initial cash flow is terrible, however the appeciation and rent growth have been outstanding. In addition, the value added via virtually any value add it outstanding.
Appreciation: my worst appreciating property has appreciated $2700/month over its long hold. This is likely worse than the worse of at least 75% of your local RE investors. Go to an RE meetup and have a couple of the RE investors calculate their monthly appreciation, I suspect virtually all will have done better. I have 2, maybe 3, properties that have appreciated over $10K a month over the hold. This likely beats far more than 75% of non-commercial properties (likely over 95%). You can realistically expect long term monthly appreciation between these 2 numbers.
Cash flow: rent growth is far more important for long term cash flow than the initial cash flow. What does this mean? It means that the cash flow can be outstanding for a long term hold in our markets. Many of my properties have rent ratios over 2% of purchase price, one has rent ratio over 4% of purchase price. Imagine what the cash flow could be. I will address why I used the words "can be" near the end of the post.
Value add: I completed 3 rehabs in the last year but the one I will use to make my point is a property in a very high cost area. The average PSF is over $2K. The comps showed adding a half bathroom out of existing footage added $50K of value. I am a bit skeptical, but even at 80% that would be $40K value add for a toilet and vanity. Crazy.
Tax benefits: I already mentioned the value of the cost segragations I did last year (2 properties).
Now to address the "traditional" reality. The real high cash flow is typically not achieved due to an extraction of value. I am unsure if I have ever had a loan more than 5 years and am sure I have never had a loan last 10 years. I have extracted a lot of money that has allowed me to scale. With the increase in rates that started in Q2 of 2022, there is a chance that I will have some loans that are going to go over 5 years. BTW I refinanced everything between Dec 2021 and Dec 2022. When the fed states they are going to raise rates, it is generally a good idea to believe them. My cash flow using a 40% expense ratio is a modest $19.3k/month (modest for the amount of RE holding). Imagine what my cash flow could be if I had not regularly extracted value.
Good luck
Post: The Myth of Cash Flow
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
- Votes 7,115
Quote from @Calvin Thomas:
Well, my friend, they are accurate and correct. I'm sorry that you do not feel they fit your model, but that's okay. You operate in whatever city you work out of, which is fine. However, these are real numbers in New Jersey. Perhaps the numbers are different in your locale, and again, that is fine. However, in New Jersey, 1k a month after all costs on normal operations; most would find respectable. If you don't, no worries, that's fine; I promise you, I will not lose sleep that Dan doesn't like my numbers.
Do what works for you, and I'll do what works for me. Best of luck, I will not be going back and forth any further with you on this thread.
>they are accurate and correct.
so in New Jersey you have $0 of maintenance/cap ex and zero vacancies? Do you really believe the BS you claim? Do you really think $145/unit per month of cash flow not including maintenance/cap ex or vacancy is decent cash flow? Do you really believe it is positive cash flow?
I hope you have an additional expected source of return. If cash flow is your primary return on this purchase, your return does not justify the effort and risk. This is true in all markets from Cleveland to NYC.
Good luck
Post: I want to remove this tenant? Please help
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
- Votes 7,115
does the section 8 case worker know there is only one person living in the 2 BR unit? I suspect he is getting more rent assistance than is appropriate for a single person. The case worker may handle getting rid of this tenant for you.
If you are going to be a property manager, you need to know the applicable laws. You will not always be able to request assistance on BP as some items need to be dealt with immediately. Either hire a professional PM or put in the time/effort to be a competent PM. This means learn the relevant laws. A professional PM should charge to evict a tenant that they did not place, but it can potentially save you mistakes and they may have access to an experienced eviction attorney if it is necessary. If you handle this without a professional PM, get referrals for a good eviction attorney and let them use the expertise.
Good luck
Post: I'm considering employing the Live-In Flip strategy over the next 10 years - Advice?
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
- Votes 7,115
I want to preface I am not a financial advisor, CPA, tax advisor, etc. Check everything with your trusted expert.
I have some questions/comments for you to ponder (no need to answer on BP, just think if they apply to you):
- is your unit that you currently live in rent controlled? How much is it below market rent?
- how much cheaper is it to rent than to live in a purchased property? It is my belief that Los Angeles has large cash flow negative when using accurate expense estimates. How negative is the property's cash flow if using the 50% expense rule. Note at purchase with typical rent to value ratio, the property tax alone is ~20% of rent.
- Is the primary reason for the live in flip 2 year plan to not pay the gains? If so, have you considered 1031 exchange?
- What happens if at 2 years for some reason it does not make sense to sell? What could cause such a situation? Believe it or not the two conditions most likely to result in this is exact opposites. One is that RE prices have fallen to where the profit is poor. The other is prices have risen so much with an associated increase in rents that the prop 13 discount is large.
- Accelerated depreciation is not available on an OO. If you want the quickest tax write off, it is tough to beat. My Net Income Tax Savings using Bonus Depreciation for accelerated depreciation studies competed in 2024 was $256K.
- Your plan has constraint on scaling that does not exist with other options. If a rehab takes 4 months but you have to wait 2 years, that impacts the ability to scale. In addition, you can only OO one property at a time as a primary. That also impacts ability to scale.
Discuss your plan with your trusted financial/tax advisor. There are a lot of options to consider especially if write offs is a primary motivation. Cost segregation, 1031, 2 of 5, standard depreciation, RE professional, STR "loophole", stepped up basis, prop 13 in CA, etc.
Good luck
Post: The Myth of Cash Flow
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
- Votes 7,115
Quote from @Calvin Thomas:
Quote from @Dan H.:
Quote from @Calvin Thomas:
Quote from @Dan H.:
Quote from @Calvin Thomas:
Quote from @Dan H.:
Quote from @Calvin Thomas:
Quote from @Dan H.:
Quote from @Calvin Thomas:
Quote from @Dan H.:
Quote from @Calvin Thomas:
Quote from @Collin Hays:
I got a chance to read this over lunch today, and it really hit home some excellent points about investing in real estate. Thought I would pass it along.
Not sure what Andrew is smoking, but I can give you a real world example in NJ (NYC suburb - I don't know too much about MO, but I can use NJ since we just purchased another three family.
Price 700,000
Taxes - $11k (rounded)
Insurance - $1700.00 (rounded)
Water - $100.00 (rounded)
Common Electric - $50.00 (rounded)
We can use his 7% with 20% down.
Payments - $4,930.68
Apt 1 - 2 bedroom - $2,000.00
Apt 2 - 2 bedroom - $2,050.00
Apt 3 - 1 bedroom - $1,800.00
Total income - $5,850.00
Total expenses - -$4,930.68
==========================
NET $1,019.32 x 12 = $12,231.84
The cashflow "myth" is bullsh!t. I closed last week.
Of course, we manage ourselves, so even if you take off 10%, it's still a healthy return. We don't buy SFH's, as that's just a waste of time, money, and resources. Mixed-use and MFH are key.
Realistic sustained maintenance/cap ex, vacancy, uncollected rent, PM (if your time is worth anything then it should be reflected), Misc and your cash flow is significantly reduced/gone. I think yr underwriting is why you believe cash flow myth is BS.
Good luck
I've been doing this since the late 1970's. I am pretty sure on my numbers. It obvious, you've not read that we have our own team; which we already manage several hundred doors. However, believe whatever you wish. My numbers are real life actuals. Cap-Ex would happen anywhere, and that is where reserves come in. Everything else is in line. I made a mistake on the water, it's $100 a month, not a year.
I interpret “payment” to be piti. If payment includes your maintenance team, materials, cap ex allocation, asset protection, book keeping, etc then I think further breakout would helped clarify.
I do not see any maintenance/cap ex, vacancy,, bookkeeping, asset protection, PM reflected. 100 units, 1000 units, 100,000 units, own maintenance team or not, Your post does not reflect an actual estimate of cash flow without reflecting an estimate of expenses. Your cash flow after allcating for all sustaining expenses is less than reflected. Even having your own maintenance team has a cost.
I do believe with your own maintenance team, your maintenance/cap ex will be less but having w2 employees means additional bookkeeping and those pesky charges (SS, workman’s comp, unemployment, etc).
Your post does not provide an accurate representation and could have benefitted by details like that you have your own maintenance team due to having a large number of units.
$340/month per unit without reflecting those additional expenses is thin. It would not be worth the risk/effort for my if that cash flow was the primary source of the return.. I once had insurance go from below $1k/year to $6k a year in 3 years Over $400/month increase of a single expense item (Gulf Shores, ~20 Years ago, we made 2 large claims in consecutive years due to hurricanes). Fortunately my underwriting includes an estimate of all expenditures and had solid (more than $450/month) cash flow.
Good luck
I guess we look at things differently. In all of our buildings, we calculate the monthly gross costs and reconcile monthly. I used a real world example, as the building closed last week and already had tenants; which they are month-to-month, and raised 4% effective April 1st (NJ is a guaranteed renewal State).
There are no CapEx expenses at this time. We keep 20% in reserves per building to cover these potential issues at a later date. Again, third time, there is no management fees as we self manage, but I included a 10% fee in my breakdown above in case someone brought this up (I.E. you).
Not sure what you mean about bookkeeping or asset protection. Book keeping is done by our CPA, and we are not charged an additional fee for new buildings. Asset protection, that called insurance; which was included in the breakdown. One can purchase in an LLC or potentially transfer into an LLC once the deal has closed (check with a lawyer first). The LLC protection isn't truly protected unless more than one party owns the building. Again, check with an attorney.
All expected expenses are listed and are rounded up (listed above). One cannot plan for the unknown, but this is why people need to have significant savings or lines of credit to handle the what happens in life.
I viewed the insurance to be property insurance (fire, etc) and not asset protection. If it is inclusive of asset protection that was not clear.
I do not see maintenance expense, vacancy, uncollected rent, or evictions reflected anywhere.
Even if you have a CPA already working other efforts for you, they are not doing additional work without charging you. CPAs are not cheap. If you have W2 employees as you suggested by stating you have maintenance crew, that requires bookkeeping (payroll). Even using dedicated independent contractors as your maintenance crew requires book keeping (bills receivable, payment, bookkeeping to track expenses for tax purposes and warranty claims, etc.).
Having a reserve for cap ex, but not allocating any estimate for the cap ex cost means that your cash flow estimate does not include cap ex. Note I am not stating that you do not have the reserves or assets to cover cap ex (only that you have not allocated it in your expense estimates).
Your cash flow estimate is missing some very obvious expenses that will consume virtually all of that cash flow. However, even if that was an accurate cash flow estimate ($340/month per unit (which if I include your PM estimate gets lowered to $145/month after including your PM allocation)), that is very thin margin (but it is not an accurate expense estimate as I already demonstrated so in actuality is smaller).
At $145/month (including PM allocation) to make a modest (far from able to live comfortably on) $50K year would require 28 units. Using cash flow with accurate expense estimates would require many times this number of units to have $50K/year cash flow. I suspect to get cash flow from those units of $50K/year with accurate expense estimates likely would require over 100 units. This would be a lot of work even with the use of a PM.
I do not know why you invest in RE. I invest in RE to live a life of comfort that allows me to do what I want and to give money to who I want. If that purchase is relying on cash flow for its primary return, it will be challenging to achieve this goal with that type of purchases.
I do not know that this property is not in a great appreciation area or has a good/great value add. I am not judging the quality of the investment. What I am saying is that your subject property does not make a good case about cash flow not being substantial (the cash flow on that property is poor but cash flow alone does not dictate the quality of the investment).
BTW I have properties that I consider to have poor cash flow (but my underwriting includes best estimate of sustained expenses), but are still good/great investments.
Good luck
Whatever you say dude. Stay in your lane, and I'll stay in mine.
Is your lane creating deceitful posts? You left out significant expenses like maintenance/cap ex and vacancy to provide an inaccurate forecast on cash flow. I point it out and your response if "whatever dude ..." Not something along the lines that in your haste you let out some significant expenses or that admits the number is not an accurate even half a$$ attempt at a rough true cash flow number. I am not even stating your deceptive post was intentional but with you not owning up to the expenses that were not included, I am starting to question if for some reason you intentionally posted numbers that did not depict all expenses.
I want people to post corrections to such erroneous posts with so that newbies do not see similar numbers and think that the referenced property is good cash flow.
Again I am not stating anything about the quality of the investment. it could be a very good investment as I do not have the information to provided an educated thought on that. However, you did provide your cash flow calculation and it clearly was deficient some significant expenses and using your own numbers was not significant cash flow (Assuming that you do not consider $145/month unit with not all expenses included significant cash flow). It needs other sources of return to be a good investment and it may have those.
Good luck
Whatever you say dude. These are real numbers. If you want to call them deceit, knock yourself out. I've only been doing this for 40+ years. What do I know.
Best of luck in whatever you do.
>I've only been doing this for 40+ years. What do I know.
Apparently not how to include maintenance/sap ex or vacancy in your cash flow numbers.>These are real numbers. If you want to call them deceit, knock yourself out.
What is your definition of real numbers? I think most of us would state that any cash flow numbers that are missing maintenance/cap ex and vacancy are not accurate numbers. So if it was accidentally omitted then it is a mistake, but that you keep claiming these are real numbers without maintenance/cap ex and vacancy (as well as various other expenses) leads me to lean toward deceit.
However, you look at it, $145/unit per month not including vacancy, maintenance/cap ex, and various other expenses makes the OP's case. Your example clearly does not have positive cash flow when properly allocating for all expenses. I do not understand how this is not apparent to someone who has been doing this for 40+ (BTW i have been in REI longer, but I suspect most people do not need 40+ years to see that with complete expense estimates the $145/month per unit is negative).
Hopefully you did not purchase this primarily on the cash flow.
Good luck
Do you have anything better to do than bother me? Go away and do as you wish. I do not get into online pissing matches. Do whatever you want. Believe whatever you want. If you need help, which you may, feel free to text the Bigger Pockets support line. 720-902-8552
What I desire is to provide new RE investors real/accurate information. If someone posts cash flow numbers missing obvious expenses like maintenance/cap ex and vacancy, I think it is important to point it out. This can save a new RE investors from making a big mistake.
What I find interesting is that you still post as though those numbers could represent an accurate cash flow estimate. If you had indicated that the actual cash flow should include maintenance/cap ex, vacancy, and other expenses that would have been nice.
Instead you act like your numbers represent a best estimate of cash flow which is clearly not the case. The $145/month per unit will be negative when including real expense estimates. You have made the OP's case for him.
I do not know your issue. Clearly your calculations left off significant expenses and is not a best calculation of the cash flow. This is obvious even to new RE investors reading this thread, which is/was my intent (to protect the new investors from misinformation).
Have a great day.
Post: The Myth of Cash Flow
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
- Votes 7,115
Quote from @Calvin Thomas:
Quote from @Dan H.:
Quote from @Calvin Thomas:
Quote from @Dan H.:
Quote from @Calvin Thomas:
Quote from @Dan H.:
Quote from @Calvin Thomas:
Quote from @Dan H.:
Quote from @Calvin Thomas:
Quote from @Collin Hays:
I got a chance to read this over lunch today, and it really hit home some excellent points about investing in real estate. Thought I would pass it along.
Not sure what Andrew is smoking, but I can give you a real world example in NJ (NYC suburb - I don't know too much about MO, but I can use NJ since we just purchased another three family.
Price 700,000
Taxes - $11k (rounded)
Insurance - $1700.00 (rounded)
Water - $100.00 (rounded)
Common Electric - $50.00 (rounded)
We can use his 7% with 20% down.
Payments - $4,930.68
Apt 1 - 2 bedroom - $2,000.00
Apt 2 - 2 bedroom - $2,050.00
Apt 3 - 1 bedroom - $1,800.00
Total income - $5,850.00
Total expenses - -$4,930.68
==========================
NET $1,019.32 x 12 = $12,231.84
The cashflow "myth" is bullsh!t. I closed last week.
Of course, we manage ourselves, so even if you take off 10%, it's still a healthy return. We don't buy SFH's, as that's just a waste of time, money, and resources. Mixed-use and MFH are key.
Realistic sustained maintenance/cap ex, vacancy, uncollected rent, PM (if your time is worth anything then it should be reflected), Misc and your cash flow is significantly reduced/gone. I think yr underwriting is why you believe cash flow myth is BS.
Good luck
I've been doing this since the late 1970's. I am pretty sure on my numbers. It obvious, you've not read that we have our own team; which we already manage several hundred doors. However, believe whatever you wish. My numbers are real life actuals. Cap-Ex would happen anywhere, and that is where reserves come in. Everything else is in line. I made a mistake on the water, it's $100 a month, not a year.
I interpret “payment” to be piti. If payment includes your maintenance team, materials, cap ex allocation, asset protection, book keeping, etc then I think further breakout would helped clarify.
I do not see any maintenance/cap ex, vacancy,, bookkeeping, asset protection, PM reflected. 100 units, 1000 units, 100,000 units, own maintenance team or not, Your post does not reflect an actual estimate of cash flow without reflecting an estimate of expenses. Your cash flow after allcating for all sustaining expenses is less than reflected. Even having your own maintenance team has a cost.
I do believe with your own maintenance team, your maintenance/cap ex will be less but having w2 employees means additional bookkeeping and those pesky charges (SS, workman’s comp, unemployment, etc).
Your post does not provide an accurate representation and could have benefitted by details like that you have your own maintenance team due to having a large number of units.
$340/month per unit without reflecting those additional expenses is thin. It would not be worth the risk/effort for my if that cash flow was the primary source of the return.. I once had insurance go from below $1k/year to $6k a year in 3 years Over $400/month increase of a single expense item (Gulf Shores, ~20 Years ago, we made 2 large claims in consecutive years due to hurricanes). Fortunately my underwriting includes an estimate of all expenditures and had solid (more than $450/month) cash flow.
Good luck
I guess we look at things differently. In all of our buildings, we calculate the monthly gross costs and reconcile monthly. I used a real world example, as the building closed last week and already had tenants; which they are month-to-month, and raised 4% effective April 1st (NJ is a guaranteed renewal State).
There are no CapEx expenses at this time. We keep 20% in reserves per building to cover these potential issues at a later date. Again, third time, there is no management fees as we self manage, but I included a 10% fee in my breakdown above in case someone brought this up (I.E. you).
Not sure what you mean about bookkeeping or asset protection. Book keeping is done by our CPA, and we are not charged an additional fee for new buildings. Asset protection, that called insurance; which was included in the breakdown. One can purchase in an LLC or potentially transfer into an LLC once the deal has closed (check with a lawyer first). The LLC protection isn't truly protected unless more than one party owns the building. Again, check with an attorney.
All expected expenses are listed and are rounded up (listed above). One cannot plan for the unknown, but this is why people need to have significant savings or lines of credit to handle the what happens in life.
I viewed the insurance to be property insurance (fire, etc) and not asset protection. If it is inclusive of asset protection that was not clear.
I do not see maintenance expense, vacancy, uncollected rent, or evictions reflected anywhere.
Even if you have a CPA already working other efforts for you, they are not doing additional work without charging you. CPAs are not cheap. If you have W2 employees as you suggested by stating you have maintenance crew, that requires bookkeeping (payroll). Even using dedicated independent contractors as your maintenance crew requires book keeping (bills receivable, payment, bookkeeping to track expenses for tax purposes and warranty claims, etc.).
Having a reserve for cap ex, but not allocating any estimate for the cap ex cost means that your cash flow estimate does not include cap ex. Note I am not stating that you do not have the reserves or assets to cover cap ex (only that you have not allocated it in your expense estimates).
Your cash flow estimate is missing some very obvious expenses that will consume virtually all of that cash flow. However, even if that was an accurate cash flow estimate ($340/month per unit (which if I include your PM estimate gets lowered to $145/month after including your PM allocation)), that is very thin margin (but it is not an accurate expense estimate as I already demonstrated so in actuality is smaller).
At $145/month (including PM allocation) to make a modest (far from able to live comfortably on) $50K year would require 28 units. Using cash flow with accurate expense estimates would require many times this number of units to have $50K/year cash flow. I suspect to get cash flow from those units of $50K/year with accurate expense estimates likely would require over 100 units. This would be a lot of work even with the use of a PM.
I do not know why you invest in RE. I invest in RE to live a life of comfort that allows me to do what I want and to give money to who I want. If that purchase is relying on cash flow for its primary return, it will be challenging to achieve this goal with that type of purchases.
I do not know that this property is not in a great appreciation area or has a good/great value add. I am not judging the quality of the investment. What I am saying is that your subject property does not make a good case about cash flow not being substantial (the cash flow on that property is poor but cash flow alone does not dictate the quality of the investment).
BTW I have properties that I consider to have poor cash flow (but my underwriting includes best estimate of sustained expenses), but are still good/great investments.
Good luck
Whatever you say dude. Stay in your lane, and I'll stay in mine.
Is your lane creating deceitful posts? You left out significant expenses like maintenance/cap ex and vacancy to provide an inaccurate forecast on cash flow. I point it out and your response if "whatever dude ..." Not something along the lines that in your haste you let out some significant expenses or that admits the number is not an accurate even half a$$ attempt at a rough true cash flow number. I am not even stating your deceptive post was intentional but with you not owning up to the expenses that were not included, I am starting to question if for some reason you intentionally posted numbers that did not depict all expenses.
I want people to post corrections to such erroneous posts with so that newbies do not see similar numbers and think that the referenced property is good cash flow.
Again I am not stating anything about the quality of the investment. it could be a very good investment as I do not have the information to provided an educated thought on that. However, you did provide your cash flow calculation and it clearly was deficient some significant expenses and using your own numbers was not significant cash flow (Assuming that you do not consider $145/month unit with not all expenses included significant cash flow). It needs other sources of return to be a good investment and it may have those.
Good luck
Whatever you say dude. These are real numbers. If you want to call them deceit, knock yourself out. I've only been doing this for 40+ years. What do I know.
Best of luck in whatever you do.
>I've only been doing this for 40+ years. What do I know.
Apparently not how to include maintenance/sap ex or vacancy in your cash flow numbers.>These are real numbers. If you want to call them deceit, knock yourself out.
What is your definition of real numbers? I think most of us would state that any cash flow numbers that are missing maintenance/cap ex and vacancy are not accurate numbers. So if it was accidentally omitted then it is a mistake, but that you keep claiming these are real numbers without maintenance/cap ex and vacancy (as well as various other expenses) leads me to lean toward deceit.
However, you look at it, $145/unit per month not including vacancy, maintenance/cap ex, and various other expenses makes the OP's case. Your example clearly does not have positive cash flow when properly allocating for all expenses. I do not understand how this is not apparent to someone who has been doing this for 40+ (BTW i have been in REI longer, but I suspect most people do not need 40+ years to see that with complete expense estimates the $145/month per unit is negative).
Hopefully you did not purchase this primarily on the cash flow.
Good luck
Post: Top 10 Cities where Home Prices will Crash in 2025
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
- Votes 7,115
My family has been an RE investor since the 1970s. I have never heard of Reventure prior to this post. Did a google search and then looked at the "About us" in hopes to find out how long they have existed. The about us does not list the year of founding or much other info about their history.
It certainly is not Core Logic, Case Shiller, NeithborhoodScout, Zillow, Redfin, Property Hub, etc.
This is not stating anything about the accuracy of their forecast except that I suspect they have no significant track record that would provide the capability to analyze their forecasts.
Core logic regularly (monthly?) provides a list of a few locations that they believe are most likely to fall in price. They even provide a percentage of probability for the forecast.
Florida, Texas, and Colorado cities make up the list.
Next year we can see how accurate the forecast was.
I personally would take properties in most of those cities over many midwest cities for a long term hold (10+ years). A single year forecast has very little interest to me and my long term RE investment strategy.
Best wishes
Post: San Diego County leads nation in the largest increase in credit card delinquencies
#1 House Hacking ContributorPosted - Investor
- Poway, CA
- Posts 6,157
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In San Diego city the average SFH costs over $1m. At 80% LTV that is over $800k of debt. I am a bit surprised that the per capita debt is not higher in CA.
I suspect most of the higher per capita debt will be in markets with high housing costs because housing in those markets make up the majority of debt.
I looked up average credit card debt by state. Ca credit card debt ($6222) was slightly above the national average ($6194). If CA income ($81,225 in 2023 - 7th highest in nation) to credit card debt is used, CA credit card debt is lower than a very large percentage of states.
https://www.cnbc.com/select/average-credit-card-balance-by-s...
https://www.statsamerica.org/sip/rank_list.aspx?rank_label=p...
As it relates to RE, the large CA cities have both delinquency and eviction rates near the lowest in the country.
Nothing unexpected in any of the data. Nothing to concern CA RE investors
Best wishes