All Forum Posts by: Jacob Sampson

looks like you have about $100/month in cash flow which is a reasonable target.  Nice job and congrats!!

I guess it depends on what you consider an investment.  For example, my wife likes to frame discussions about purchasing something (a book, toy, or anything) as, "we should invest" in a new...  While that is technically true we have invested money in something, I doubt that would meet most investors definition of an investment.

To me an investment generates positive cash flow...that's it (I recognize that others would consider this too narrow a definition, but for me, that is what I care about.)

These properties won't cash flow, they are purely an appreciation play and that is closer to gambling than investing...to me.

IMO it is to expensive for 4k in monethly income.  You probably need to add an additional 5% to your Repairs, vacancy, and capex number.  Those 3 items will likely be closer to 30%.  Additionally, the property value and income will not average an increase of 3% per year long term.

What class of neighborhood is it?

Yep, and what @Jay Hinrichs said.

The vast majority of the time people don't buy their personal residence for a price that allows it to cash flow.  Taking it a step further, hot markets rarely cash flow.  Both of those scenarios apply to you.  This house will not cash flow.  over the long run you will be putting your own money back into it to keep it going.  And as Robert Kyosaki (sp?) says, an asset is something that puts money in your pocket it doesn't take money from it.  This house will take money from your pocket.

Also, it will be difficult to purchase enough property to make enough money for 30+ people to actually get excited about.

Partnerships are challenging and the more partners you have the more challenge their will be.  It will be difficult to keep 30+ happy.

Congrats on your first investment!  I'm not sure you will see any long term average cash flow, but hopefully you can get some nice asset appreciation.

What will it rent for?

I would sell.  You are going to be higher than neg $317 cash flow because your repair and vacancy should probably be around 15-20%, for just those two items.  Plus, there is no guarantee you can get a consistent 3% annual appreciation.  Probably better to just take the 30k you would clear upon selling and invest it in something that will give a better return.