All Forum Posts by: James Quinn

@Account Closed, Thank you so much for the response, i'm still new to everything so i'm trying my best to get everything right before i start investing. So i took your advice and made the repair cost and cap ex 8% instead of the previous 5%. Repairs then come to $212 a month and cap ex is around $200 a month. This made my annual cash flow $11,820, then dividing that from my total investment brings it down to about an 18% ROI. This is a little bit more reasonable and if i overestimate about $100 a month for sewer, garbage, and other fees, then this would probably bring the ROI to %16 or so percent. I still feel like this cash flow and ROI is super high. Did i just get really lucky and find a solid property? Thanks again for the feedback!

Hello everyone, thanks to the help of all of you, i have begun practicing finding properties in my area and running the numbers on the cash flow, ROI, etc. I found 2 multi-family properties and i'll use one as an example today, but both of them have come out to be an above 20% ROI which i feel like is really high. The property i found is a 2624 sq-ft 2 unit house with 5 beds and 2 baths for $259,000. The first unit is a 3 bed 2 bath and the second is a 2 bed 2 bath. I used rentometer to estimate rent in my area, and for the bigger unit, rent would be about $1,400 and the smaller would be about $1,250. Both of these numbers i rounded down. So i got a total rental income of $2,650 a month. Then i ran a mortgage calculator with 20% down, which would be a $51,800 down payment, and the total mortgage would be $913 a month, which i got by subtracting tax and insurance in my area which was $208 in total. Interest rate for the mortgage in my area is about 3.1% which is why the mortgage is so low. Anyway, these are the expenses: utilities at $0, assuming they would pay them, vacancy $132 a month which is 5% of the rental income, repairs $150 a month, cap ex $100 a month, no property management, and the mortgage at $913 a month. Total expenses for the property would be $1,503 a month, bringing the cash flow to $1,147 a month. Total investment into the property: $51,800 down, $3,000 estimated closing, $10,000 estimated rehab, for a total of $64,800. Total annual income for the property would be $13,764 a month, divide $64,800 to get a 21% ROI. I know that was a ton of numbers, but that has been multiple properties for me, really high ROI and i'm not sure if i'm doing something wrong. If someone could help me out it would be a awesome! Thanks so much!

@Amy Aziz, I have looked into redfin a little bit but I guess I need to use it more often! Are you saying that Redfin has better comparables, or its just easier to use? Thanks for the advice!

Hello everyone, so I'm still very new to real estate and while practicing to find deals on Trulia and Zillow, i ran into a few problems that just come down to my lack of experience. I've been able to find a property or 2 that have decent cash flow, but then when i try to compare properties around for their value, i just cant seem to find a place that is under value, or somewhere that i could rehab to match value or bring it higher. I compare properties by going to the "sold" options in the area on Zillow, then sorting them by their number of bedrooms, bathrooms etc and see how they compare to the property i find. Does anyone have some tips on how to practice finding deals or running comps? Thanks!

What an awesome response haha. So essentially what you're saying is that if your property is cash flowing 60% more than your mortgage, your loan, then scale wont matter? So if you had a property that produced $2000 in rent every month, but $700 goes towards repairs, cap ex, utilities, HOA fees etc, and $800 of that goes towards the lets say 30 year fixed mortgage for the house/duplex in this case. Then it would be $2000 / $800 to get 2.5? The property is also cash flowing $500 a month, so would you do Net Income / Debt/Mortgage, or $500/$800 = 62.5% which is above 60%. So in that example, you could scale from there without worrying about having debt dwarf your income? I know this response was all over the place but i'm just making sure i understand what you're saying. Thanks!

Thank you both for the input, it's been a big help on what i plan to do with my future, and there's a lot to consider. Once i get out of high school and get some job experience and money under my belt, the first thing i plan to do is house hack while building my credit in the process. Also sorry for responding late, I've been reading investing books! Haha. Anyway thanks again for the input!

So I've been getting into real estate investing recently and i just finished the bigger pockets ultimate beginners guide and learned a lot. But one thing that was not mentioned, and i cant find a lot of people talking about it, is debt in your properties. Lets say you have 20 properties all worth $100,000 and you only put $10,000 down on each property. While these properties could be cash flowing $200-$400 each, a month, you only have about $200,000 in equity over all of your properties, and $1,800,000 in debt. This seems like a lot and seems very dangerous. Could a newbie get some advice? Thanks :)

Hello, I am relatively new to real estate and real estate investing and I am only 17, but I have big plans for the future and want to get ahead of the game. What would you guys recommend that I do at this age to best prepare to jump in head first? Thanks.