All Forum Posts by: James Free

What about using cap rates here?

There are no risk-free investments. If you've completed a BRRR and later on the rent falls below your expenses AND you're underwater, you're taking a loss. If you see yourself headed in this direction, sell before you get there and move on.

How many trips to Europe does a $200k appreciation over 19 years earn you?

Buying only for appreciation is speculation. It's just like buying stock, but instead of buying an index fund, you're buying shares in a specific company, and since the transaction costs are high, you're going to stick with it no matter how it performs.

Doesn't sound so great when presented this way, does it?

But it is. Usually. Lots of people will tell you that their properties have appreciated 400% over the last 25 years, because that's actually pretty normal. But it doesn't happen everywhere, and it does depend a lot on whether you buy in 2006 or 2009!

This review might be worth looking into. https://www.yelp.com/biz/cincy-area-properties-covington

I'm Denver-based but looking to get a foothold in a lower-cost area. I've decided to focus on fourplexes in Cincinnati. I'm looking for solid BP contacts in the area; specifically recommendations for an agent, local property management, and contractors. Any other advice (neighborhood ratings?) is always appreciated. Thanks, BP community!

Regarding coal, my brother is an accountant in the industry in Gillette, WY and he's looking to get out. Natural gas prices are killing coal on a simple supply/demand basis, and Trump won't change that. The only meaningful coal demand is from China, which consumes tons of it, but US left coast states hates coal so much that they ban shipping it through them, so domestic production is trapped here, where the market is terrible. It's a dead-end industry, and until coal country has a replacement economy, it's not a place to invest.

@Kevin McCollick, you don't need to announce that you're "not a typical millennial". Just let your actions speak for you. This is a community that assumes that its new members are the right kind of people, or they would never have found this place. It's a great escape from the crowd you find on Facebook.

Happy investing!

@Jesse Flores what you posed in your original question is indeed a terrible way to make money. Read here: https://www.biggerpockets.com/renewsblog/2015/09/0....

You need to buy a place with better numbers. Put $25k down on a $100k property that rents for $1100/month, and you're more likely to cash flow.

Ben Leybovich has written plenty about the folly of investing in pigs (https://www.biggerpockets.com/renewsblog/2015/03/0...).

I am wondering if the deal below qualifies. It certainly does on purchase price, and perhaps neighborhood, but the multifamily aspect makes the prospective rent so absurd that it might be a good deal anyway.

Purchase price: $40,000

Taxes: $600/year

Units: Three 2/1 units

Market rent: $550/unit

Even with a generous capex budget, you can find a lot of room for cash flow when you're getting 4% rent/value ratio. Suppose repair/capex is 40% of rent? Fine, throw in 10% for vacancy and 20% for taxes/insurance/water and I'm STILL cash flowing over 10% on my $40,000 investment.

I understand that the key to this is actually getting tenants at $550/month, but if the market seems to support that, can a pig not be a pig?