All Forum Posts by: James Syed

@Roy N.

Thank you for replying. Like your thoughts in weighing, on cash on cash return for smaller property investment.

Vacancy rate is 10%. Seller is showing a lot of cash flow, but I can't rely on seller's statement. Property is in stable condition.

Hi members,

If you are not familiar with local area cap rates, what will be a safe range for it?

Assuming it's a multifamily property (under 24 units) in a C neighborhood (not a war zone), built year is 1970. Again, I don't mind a reasonable range as it doesn't have to be one number.

@Jonathan Makovsky you are most welcome.

@Aaron Montague

I'm curious as to how did you come up with this number.

Thank you Aaron for getting back to this issue of mine.

I agree with you. I just did an spreadsheet on my own number provided in first post on this topic and it came to be $16,000. Also, I ignored low cash on cash return as well as cap rate. The only thing OK was debt coverage ratio of 1.20 that I couldn't go lower because I have to get financing on this deal.

I agree $16,000 is the top number on this deal. I've not submitted my offer yet as I was considering to talk to BP members like you.

How did you come up with $16,000?

Aaron Montague

Thank for commenting on my post.

In addition, your comment about the bank.

Hi Jonathan,

I'm from Midwest (Illinois). I own 6 rental properties as well as a licensed real estate broker and property manager. My best advice is approximately $70 per month per unit. That number is base upon yearly number of $840.

Hope it helps.

Hi Jennifer,

Buy and hold is the way to start in real estate investing. Filliping requires experience. You must buy it right or you will ruin your investing dream. Before signing a purchase agreement, perform due diligence and come to biggerpockets for an advice.

Good luck.

1. $12,000 for paint? that seems very high for outside paint.

2. You already own the carriage house, you could make it ready anytime. I'd suggest you should go for the next property to build your portfolio. If the price goes up, you will benefit more from it

3. There are few things missing in your description which are important to give you a more realistic answer. For example, local vacancy rate, no property is rented forever, management, someone has to take care of the property, it could be you, having said that your time is worth something too so you should be paid something for it, funded reserve, mechanical depreciate in value and wear and tear will happen eventually and it would have to be taken care of i.e, roof, etc.

4. There are so many factors / formulas to come with a right price, based upon my quick analysis (8% cap rate), your purchase price would have been $212,500 or less.

You will get various replies, that was my opinion. Hope it helps.

Thank you, JT. I appreciate your post and time.

I've got 2 lenders that are assisting me with in house lending. I had the same issue before where most lenders (usually banks) didn't want to lend anything less than $50,000. I've been able to build a strong enough portfolio with these 2 lenders now that they are just keep giving me loans.

About the expense figures, these are my pro forma figures as a buyer because it's unlike that you would get true figures from the seller. I would rather be on a little high side than lower.

In addition, when you buy a single family, many costs are fixed, for example property insurance, it doesn't matter if the rent is $500 or $800, insurance will be pretty much the same.

Therefore I've come to a conclusion that if you buy a single family, your monthly rent should be $650 or to make a decent cash flow.

Hope I make sense here.