All Forum Posts by: Zachary D.

So, since I live abroad, I thought I would run some numbers on a run down place in my hometown. I hope everyone can pull back the curtains on this property. I feel like I'm barking up the wrong tree because this definitely needs a lot of repairs. But, the gap in cost and ARV seems attractive.

Property Features:

Address: http://www.zillow.com/homedetails/821-Running-Cree...

3 Bedroom 2 Bath

1986

Estimated ARV: 114,000 ( Based on redfin.com and zillow.com research )

Estimated Rent: $1300 / Month ( Based on similar criteria from around the city. )

Selling Price: 77,500

My offer: 70,000

Repairs: 7,500 ( arbitrary )

My down payment: 14,000

Payment (Including taxes, insurance, per willow) $501

Closing costs: not assumed

Commissions: not assumed

1. Determine if the selling price is reasonable considering the bad condition.

Looking at the follow numbers leads me to believe that this is a possible deal.

My offer: ( ARV$114,000 - 70%Rule ) - $10,000(Repairs) = Appx. $70,000.

2. Determine Cash Flow ( Based on area average rent and 50% rule ).

($1300 The normal rent in the area / 2 ) - $500 Mortgage = Appx. $150 of income.

3. Determine the cash on cash return, or how much of my downpayment I earn back in a year.

Yearly Income / My down payment = Amount of downpayment recovered yearly.

 $1,800 /  ($14,000  + $7,500) = 8% of the down payment and initial repairs recovered each yearly. (CoC)

Conclusion

If I used the rules correctly, I think I might have a ballpark outlook on this property as a single family rental. I can't use the BP calculator anymore and I'm not ready to go pro, so this is what I have for the moment. 

If I included the above not assumed commissions and fee, I feel like the deal might be fruitless. :( sad face.

Any insights would be helpful!

@Patrick H Thanks for the breakdown. That's fantastic. I also learned from your post about paying attention to historic districts, of which we do have some in Arlington, Texas, I believe. 

Also, I think that one thing us newbies don't think about is doing big projects like this because the numbers are big. This broadened my horizons a little. :)

Thanks again.

Arlington, Texas here, as well. Welcome! I look forward to reading about your exploits!

I just want to add that the questions and contributions here have been a huge help to me as I'm in the infancy of my own preparations. You have my votes. 

Hi, Elizabeth. Thank you!

I have been saving as aggressively as I can in these 3 years and I plan to work full-time when I come back to the United States. I know I'll have enough for a downpayment on a property in my area. But, my work history will be short because I'll be newly employed upon return. So, I gotta work that out. 

Thanks again!

Thank you so much for the tip. Despite hours of reading, I hadn't seen that yet!

Howdy. I've been living in Japan for 3 years and reading Kiyosaki's books all the while. I'm dead-sold on building a rental property portfolio when I come back to Texas in 2015 sometime to the DFW area.

Can anyone recommend a method to hone my deal-finding skills while abroad? 

Just to mention, I'm having trouble find way to hone my comping skills by web alone.

Thanks!