All Forum Posts by: Josh Randall

Brendan J.,

Actually, I did apply the 50% rule the same way as you. I just didn't "show my work" so to speak. :) I realize now it was confusing because I wrote my statement about the 50% rule immediately following the number $325.42 which included taxes and insurance.

Thanks for your input.

Bryan H.,

So you're saying the taxes could potentially go up, right?

Based on the fact that the property taxes where $540 in 2012 and the tax assessment has dropped from $22,360 in 2012 to $13,350 in 2013 am I correct to assume the property taxes should go down this year?

Dan Buck,
My brother and I will manage ourselves. I've been told by my friend who owns two similar rentals on the same street that in the 18 years he's been renting those properties he's experienced greater than 90% occupancy.

Thanks Dan

Ciprian L., Thanks!

Brian T.,

I absolutely wanted to go 30 years for the exact reason you stated, but the bank will only do 15 on an investment property and as I stated I couldn't find any other lenders who would even consider such a small loan. I called every bank in my area, spoke to the local credit unions, and I explored online too.

I agree the insurance seems high. It's the best price I've been able to find so far, but because of the age of the house and the fact that it's a rental a lot of companies don't want to touch it. I've been told by multiple agents the lack of central A/C and heat excludes some companies as well. I do have a couple more quotes coming in today though.

Thanks Brian

I'd like to get some feedback on this potential first rental my brother and I are considering purchasing.

Here's the info:

It's 2 bedroom 1 bath SFR. It's block construction. Roof was replaced the end of last year. All electrical (200amp service) and plumbing was replaced less than 10 years ago. Floors are solid oak except tile in kitchen and bathroom. All in good shape. Inside just painted. Outside is being painted tomorrow. It doesn't have central A/C or heat and a new wall unit would half to be purchased and installed into an existing opening.

The only work that needs to be done is cleaning, perhaps some light landscaping, and the purchase and install of the A/C unit mentioned above. My brother and I would handle all of that and I estimate a max cost of $1000.

Selling price $27,000

We plan to finance at 5.45% for 15 years with 20% down. Closing costs $350. Those are the requirements of the lender, BB&T. Which by the way is the only lender I could find for such a small loan amount.

So with 20% down we will finance $21,600.
Insurance = $1,244 annually.
Taxes = $540 in 2012. Although, I found out today the assessed value for 2012 was $22,360 and for 2013 has dropped to $13,350 so I would think the taxes will be less this year.

Plugging all that into BP's mortgage calculator I'm coming up with a monthly payment of $324.58.

I've confirmed the rent should be $650. I figured this from my own research of other properties in the area, the current owner who has rented the property for 12 years, and a friend who owns two SFR's on the same street.

So that leaves me with $325.42. If I apply the 50% rule that leaves me with a cash flow of $150 per month.

What are your thoughts? Let me know if I missed anything.

Priscilla Z,

My understanding is if you don't have an operating agreement it defaults to state law.

I have a generic single-member Florida operating agreement if you want it?

Hey Aaron,

Thanks for sharing your story. It definitely is inspiring to someone like me who is just starting out. Your story sounds a lot like the story of many successful people I've read about. It's never easy like you see on TV or in the movies, but you can't give up, and you didn't!

Thanks again and I wish you continued success.

Welcome to BP Kevin H. I'm in the Cocoa area too.

The local Brevard chapter meeting for the Central Florida Realty Investors Association is in Merritt Island the third Tuesday each month, which is next week.

Good luck!

Randy F.,

Thank you for offering your opinion as a contractor. I know I don't have anything close to the experience you do.

I'm basing my opinion on personal experience, both installing laminate and witnessing its durability. I personally have friends and family who have laminate in their kitchens and it's held up fine for years. One family in particular installed laminate in their kitchen, dinning room, and living room about ten years ago. They have five kids and a dog. That is not an exaggeration. And I don't think ten years ago there was anything available of the quality you can get today. My point is that when properly maintained and cared for I don't agree it's a foregone conclusion that laminate is going to fail in a kirchen.

I'm not sure I understand your thought process when it comes to rentals. Wouldn't you agree that there are many finishes that hold up fine in non-rental situations that you would, 1) never put in a rental or, 2) expect not to last due to the fact that tenants generally don't take care of a property the way a homeowner would? I know in my kitchen I very rarely spill significant amounts of liquid on the floor, but if I do I clean it up quickly. Now I certainly wouldn't expect or hope that a tenant would do the same. Instead I would install a floor that would hold up to the lack of care that a typical tenant would show to something they don't own or I would install something that was cheap to replace or repair.

As far as selling a property goes, is it the investors job to make sure all the finishes will last no matter how abusive the new owners are or how ignorant they are about how to maintain or not destroy the finishes? I don't think that is reasonable.

I'm certainly not implying that laminate is the most durable or long lasting flooring option, but at a price point in the $90,000 range, which Bonnie Buckley mentioned, no buyer is going to expect the best, most long lasting floors, or any other finishes for that matter, nor should they.

These are just my opinions. I'm sure many disagree. :)

Welcome to BP Darin Kennedy! Good luck. Maybe I'll see you around. You're not too far from me.

Randy F.,

As an investor, as long as you aren't trying to pass off laminate as something else superior, i.e., lying, I don't see the issue. It seems you are suggesting it's morally/ethically wrong to sell a house with laminate in the kitchen. It's the buyers responsibility to know how to properly maintain the floors in their home. That includes not pouring buckets of mop water on laminate or saturating carpet and leaving it to mold, etc.

The bottom line is all types of flooring have their pros and cons. Carpet holds dirt and stains easily, tile chips and cracks, vinyl can get nicks and cuts, and laminate and real wood are susceptible to water damage.