All Forum Posts by: Hunter L.

Gotcha. I don't know where the equation comes from so maybe I'm not the one to help. It may not work in your market. If I were you, I'd be using the second method.

I don't see how the first method incorporates your desired goal of 9-10% COC return. It appears to be a general equation that doesn't factor in the rental income or expenses of the property?

Hey @Hisashi N.

If you currently own SFR properties that are generating satisfactory returns, I'd ask what your motivation is for jumping into multi-family's?

I think the main reason to get involved in MF's would be to take advantage of the economies of scale. It's easier to manage and maintain an 4 triplexes than 12 individual SFR's.

You also have to consider what the rental market is like for MF's as opposed to SFR's in your area. Would you still be able to generate your 12-15% returns in MF?

You have to know what your strategy is. If you want to pay all of your mortgages down as quickly as possible, then you are not going to be able to accumulate cash to purchase more properties quickly. What will give you a better return on your money? Paying down a 4-5% mortgage or buying another property? You should run the numbers on this question, and assess the risk level that you are comfortable with.

If I was you, I'd ask myself how much debt I am comfortable assuming (60% of my portfolio's value, 70%, 80%?). Once I had that number, I'd pay my mortgages down until I reached my comfort zone, and then start accumulating cash to purchase additional properties.

@Yosef Smetana

Congratulations on the success of your practice! It's always nice to get a chance to talk to other accountants who are interested in RE. I'm not currently in a position to acquire properties, but I enjoy real estate, taxes and accounting so I'm always looking to learn.

I don't have much advice for you, but I'd encourage you to surround yourself with quality real estate professionals. Being a CPA, you should have a solid grasp on the financial side of the business, but you will need a good team around you to be successful full-time.

Best of luck!

@Harpreet Walia

There are lots of strategies out there. Check out this post on the snowball method (it's pretty popular): http://www.daveramsey.com/blog/how-the-debt-snowba...

Personally, I would focus on allocating any extra payments I was making entirely to the mortgage with the highest interest rate until it is paid off and repeat with the 2nd highest interest rate mortgage.

Hope this helps!

@Samuel Hall I'm also looking for some practice analyzing properties!

Why is $23,118 owed on the property, and would you have to clear it?

Also, how did you get your cash-on-cash return of 83.38%?

@Moe Rehman Hey Ali, it seems that most of the Northern VA markets aren't great cash flow markets. I haven't been very active in searching the past couple of months mostly due to a busy schedule.

What types of properties are you interested in?

Sorry about the late response, I haven't been on BP in a while!

@Jessica Swingle Thanks for all the info, it's appreciated! When I get back in the area, I'll e-mail you about your list of meetup groups.

@Donald Capwell I'm about an hour and a half north of Fredericksburg. I have all the information I need at the moment but thanks for taking the time to respond. I'm sure I'll have more questions about the area in the future.

Quick analysis:

19,500 gross rental income

50% rule -> ($9,750)

Based on the 50% rule you'd have $9,750 left over after all expenses to cover $4,644 in yearly mortgage payments leaving you with....

$5,106 cash flow ($212/door/month).

The numbers look pretty good to me in a quick and dirty analysis without knowing much about the property!