All Forum Posts by: Jacob Shoesmith

 Almost all houses in this college town, including the ones I lived in while attending this college, are leased July 20ish to Aug 1 or July 31 to Aug 10ish. 8 days / 365 days = 2.2% I'm not sue how landlords do it but this is very common.

@Jacob Shoesmith

Preleasing

@Chris Seveney

See above comments.

@Bruce Lynn

1970

Every house I’ve lived in and heard of with friends, even the same for townhomes and apartments, all have tenants out by July 22ish and move in is August 1. Or something similar. That’s my vacancy comment. So 1, maybe 2 weeks max.

I will up my wear and tear.

The college hadn’t yet released whether they were having in-person classes this year so all landlords dropped their rents so they would get some tenants for sure. It wasn’t til a few weeks before Fall semester started that they announced that they would. Therefore, houses are already preloading right now for next year at really high rents!

Let me get y'all's opinion.

Asking Price: $265k

Our Offer (repairs needed): $230k

Their counter: $265k

Our Next Offer: $245k

They declined

Our Final offer (matched a previous buyer who backed out): $257.5k

Super stubborn folks who don't want to contribute to or fix any needed repairs. They kept saying all throughout the buying process "Well, we don't really need to sell it. We like the cash flow. We actually think its worth $275k!" The numbers proved good so we ignored this and put in our offer that was accepted: $257.5k.

We had HVAC, pest, roof, and tree inspectors come out. Estimated repairs (may or may not do some of it ourselves) = $3000. Of course, depending on the future appraisal we will try to get it lowered but based on the previous discussions my agent thinks they won't budge at all. However, the numbers still check out. See below. Thoughts?

Purchase: $257.5k

Down Payment: 20%

Payment: $1387/mo (interest, principal, insurance, taxes)

No HOA

Vacancy: 2% (college town so 1-2 week turnover)

Repairs & CapEx: ~$150/mo

Current lease thru July (college students): $2000/mo

Cash Flow: $463/mo

We plan to charge $2200-2500 in August for new college students. New cash flow would be $663-963/mo.

Hello,

The city in which our soon-to-own first residential property limits non-family members to 4 yet our property has 5 bedrooms. My agent says people just put 4 people on the lease but you still collect 5 separate payments. Do I have one lease with 4 people on it or do I have 4 leases, one for each person? The fifth person will just pay me via Cozy or Avail.co

Any insight? I want them all to be responsible for the entirety fo the payment if someone falls out or can't make a payment. Typically the parents of these tenants will be paying.

My first investment property is a 5/2 SFH in a college town so typically parents are paying the rent. Which online platform(s) should I use for rent collection, screening, credit, document sign, etc?

@Gregory Schwartz

I did 10% maintenance, 5% vacancy, and 10% CapEx. One of the houses was built in 2008 so I did 5% CapEx on that one. All three have no HOA.

@Gregory Schwartz

So one of the houses is very close to sorority houses so they have a pretty good occupancy rate. Another house is in a less popular area but still fills up. The final one is in a small patch of this town that’s kinda funny. It’s pretty low income and is surrounded by pretty popular houses. Some people may steer away from this house because of the neighbors but those neighbors are actually being pushed out because people are buying those low income houses and rebuilding them/tearing them down and make newer homes. It’s almost gentrification but not as strong.

Hello,

Thanks in advance for all of the advice and help. I am 24 y/o living in Houston, looking to invest with my father in our first rental property (not worried about family and business joining together). I am mostly having my father help with this (50/50) because I do not want our first rental to affect me buying my first primary residence in Houston. I do not know the tax laws and rules with this nor do I know how much I will actually be hindered by purchasing a rental first with my name on it. However, I have heard it can hurt my future wife and I buying our first residence so I want to avoid that. I will likely have my primary house in Houston over the next year but definitely within two because I will likely be married before then. My father and I will split the down payment for the rental 50/50.

Last night we watched Brandon Turner's "How to Buy Small Multifamily Properties!" webinar and it was so helpful and encouraging! However, after signing up for BP Pro, using the calcs to run the numbers, and checking against 30+ properties in our desired area, we only found THREE with at least 7% CoC ROI and decent cash flow (it's funny because the few houses we thought were in the best areas with a guaranteed 100% occupancy year after year were actually really poor investments after we run the numbers).

I would like to put the high level facts here and get your opinions on which you would pursue and why. I understand it is all subjective and purely for reference, not legal advice. All of the below are single family homes (SFH) in a COLLEGE TOWN with one of the BEST rental markets in Texas. The typical leases in this college town are 8/15 through 7/31 or something similar. Additionally, due to COVID, many landlords were uncertain if the school would even have in-person classes. Therefore, they reduced rental rates so they would at least make some money per month. It wasn't until two months after most leases were signed that the university stated they would be having in-person classes. The current rental rates below may actually be better next school year because of this. I made some assumptions using the BP Property Insights calculator. It is all listed below. Thanks!

Property #1

• 3 bed, 2 bath
• Assumed purchase for $195k, listed for $200k
• Down Payment: $39k
• Interest Rate: 3.75%
  
• Monthly Rental Income: $1800
• Monthly Expenses: $1517.04
• Monthly Cash Flow: $298.54
• Cash on Cash (CoC) ROI: 7.96%
• Currently leased month-to-month for $1800

Property #2

• 4 bed, 2 bath
• Assumed purchase for $195k, listed for $198k
• Down Payment: $39k
• Interest Rate: 3.75%
  
• Monthly Rental Income: $1600
• Monthly Expenses: $1,273.01
• Monthly Cash Flow: $312.79
• Cash on Cash (CoC) ROI: 8.34%
• Currently leased until 7/31 for $1600

Property #3

• 4 bed, 3 bath
• Assumed purchase for $205k, listed for $214k
• Down Payment: $341k
• Interest Rate: 3.5% (Idk why but I assumed a slightly better rate)
• Monthly Rental Income: $1800
• Monthly Expenses: $1474.91
• Monthly Cash Flow: $339.57
• Cash on Cash (CoC) ROI: 8.67%
• Currently NOT leased (would not get tenants until 8/15 or similar unless we get partial tenants, a 6-month lease, etc.)

What do y'all think? Our cash flow would be split 50/50 by the way so if our cash flow is $250, we will each only get $125 (and maybe that's okay for our first property but I would like more obviously!). Brandon Turner's minimum is $100 total cash flow but he prefers at least $200.

Hello,

Thanks in advance for all of the advice and help. I am 24 y/o living in Houston, looking to invest with my father in our first rental property (not worried about family and business joining together). I am mostly having my father help with this (50/50) because I do not want our first rental to affect me buying my first primary residence in Houston. I do not know the tax laws and rules with this nor do I know how much I will actually be hindered by purchasing a rental first with my name on it. However, I have heard it can hurt my future wife and I buying our first residence so I want to avoid that. I will likely have my primary house in Houston over the next year but definitely within two because I will likely be married before then. My father and I will split the down payment for the rental 50/50.

Last night we watched Brandon Turner's "How to Buy Small Multifamily Properties!" webinar and it was so helpful and encouraging! However, after signing up for BP Pro, using the calcs to run the numbers, and checking against 30+ properties in our desired area, we only found THREE with at least 7% CoC ROI and decent cash flow (it's funny because the few houses we thought were in the best areas with a guaranteed 100% occupancy year after year were actually really poor investments after we run the numbers).

I would like to put the high level facts here and get your opinions on which you would pursue and why. I understand it is all subjective and purely for reference, not legal advice. All of the below are single family homes (SFH) in a COLLEGE TOWN with one of the BEST rental markets in Texas. The typical leases in this college town are 8/15 through 7/31 or something similar. Additionally, due to COVID, many landlords were uncertain if the school would even have in-person classes. Therefore, they reduced rental rates so they would at least make some money per month. It wasn't until two months after most leases were signed that the university stated they would be having in-person classes. The current rental rates below may actually be better next school year because of this. I made some assumptions using the BP Property Insights calculator. It is all listed below. Thanks!

Property #1

• 3 bed, 2 bath
• Assumed purchase for $195k, listed for $200k
• Down Payment: $39k
• Interest Rate: 3.75%
  
• Monthly Rental Income: $1800
• Monthly Expenses: $1517.04
• Monthly Cash Flow: $298.54
• Cash on Cash (CoC) ROI: 7.96%
• Currently leased month-to-month for $1800

Property #2

• 4 bed, 2 bath
• Assumed purchase for $195k, listed for $198k
• Down Payment: $39k
• Interest Rate: 3.75%
  
• Monthly Rental Income: $1600
• Monthly Expenses: $1,273.01
• Monthly Cash Flow: $312.79
• Cash on Cash (CoC) ROI: 8.34%
• Currently leased until 7/31 for $1600

Property #3

• 4 bed, 3 bath
• Assumed purchase for $205k, listed for $214k
• Down Payment: $341k
• Interest Rate: 3.5% (Idk why but I assumed a slightly better rate)
• Monthly Rental Income: $1800
• Monthly Expenses: $1474.91
• Monthly Cash Flow: $339.57
• Cash on Cash (CoC) ROI: 8.67%
• Currently NOT leased (would not get tenants until 8/15 or similar unless we get partial tenants, a 6-month lease, etc.)

What do y'all think? Our cash flow would be split 50/50 by the way so if our cash flow is $250, we will each only get $125 (and maybe that's okay for our first property but I would like more obviously!). Brandon Turner's minimum is $100 total cash flow but he prefers at least $200.