All Forum Posts by: Jacob P.

Cool thanks for the insight Robert, and great to have the Mortgage News Daily link.

Thanks Robert. I think locking in the next 5-7 day kind of thing is probably what he had in mind. I was a little inclined to kick back and trust the originator to work it out, but based on your feedback I'm gonna monitor things more closely and will definitely be on it if we haven't locked in the next week.

I found the bankrate site listing 3 month trends in interest rates. Do you think that's the best place to monitor it?

Hi guys,

Relative newbie here. I'm in the middle of purchasing a multi-family home. We're getting close to setting a closing date. I was on the phone with our mortgage originator, and we discussed the recent interest rates jump.

I had assumed that we had some sort of a lock on the rate that was quoted in our GFE, (4.125). But I learned this is not the case. The originator told me that if we were to lock it today, we would be looking at 4.375 to 4.5. However, he suggested that we wait, and seemed to be pretty confident that we would be able to lock it at a lower rate over the next few weeks. This jump would add over $100/month on our loan.

Part of me is worried that rates will just continue to rise. Just wanted to see if any BP members had any input on his strategy or there's anything else I should be thinking of at this time. 

Thanks for any input!

Got it, @Brandon Hall . There was part of me that suspected that the cap ex would be something that could be figured slightly more on a house-by-house basis compared with other categories of expenses. Thanks for your insight.

Got it. Thanks so much for the feedback. I really appreciate it.

So the way I'm figuring it, the 50% from the 50% rule likely breaks down somewhat like this:

10 percent maintenance
10 percent property management
10 percent vacancy
10 percent insurance
10 percent long term repair reserves

It's quite interesting to me to see how many different ways there are to calculate these things. For example, that other calculator bases maintenance costs on a percentage of property value (whereas obviously the 50% rule does it as a function of rent).

I'm also looking in a couple different areas where the tax rates have an insane amount of variation (I'm talking a 10x or more difference). It's making it a bit harder to compare apples to apples. For example, it's super easy to find properties that make the 1% rule in the highly taxed area.... and basically impossible to find properties that do the same in the low tax area.... but when I run the numbers through a calculator the properties start looking very similiar in terms of cashflow potential.

I'm new to Bigger Pockets, and recently started playing with the investment calculator. 

Previously, I had used another online calculator which had a "maintenance" field that was pre-populated with an estimate of 10% of monthly rent. There was no field for capital expenditures. On the BP calculator, I see that there is a "capital expenditure" AND a "repairs" field. I guess I hadn't really considered saving for capital expenditures as part of the investment, but while doing some research, I see some people on the forums suggest budgeting as much as 10 percent for repairs, AND 10 percent for capital expenditure.

Obviously that 10 percent has the potential to be a big chunk of potential cash flow. I would love to hear what numbers others are plugging in for these fields. 

Thank you @Raymond B. ! Great to have this on the radar and we will be there!

Hi guys,

I came across bigger pockets while podnering some long term strategy stuff, and I would love some insight on my situation.

My wife and I are looking for investment opportunities. We met and lived in Brooklyn, NY, but moved to Connecticut about a year ago when we purchased our first home here which dramatically lowered our monthly expenses.

We are both freelancers in the advertising world, so our work revolves around NYC, and we would love to be back in the city long term. We've been exploring multi-family homes and have found some in Brooklyn where numbers in terms of cash flow, buying slightly below market, etc. seem decent. We can swing a purchase in Brooklyn, but it would be a huge portion of our net worth going into the down payment.

I'm a bit of the mindset that it's best to start smaller, approach the learning curve on smaller investments, and exploring Connecticut or possibly upstate New York (or anywhere else someone on BP might recommend!) where the ROI on cash flow seems to be better. However, I'm mostly of the long term buy-and-hold mentality, so could see this turning into a scenario where I own single families or small multi-families spread out geographically. After reading up on the forums here on BP, I see that it's not that uncommon for investors to go outside their own backyard depending on where the deals are good but I would LOVE any input on my particular situation.

Thanks!