All Forum Posts by: James Robbins

Sean, not sure if you have been following this property but it just sold on 5/29 for $250K. It should cash-flow but not a great deal by any means. Best of luck in your search.

You may have already found answers to your problem by now but you could try reaching out to Rory Gill. He has written a blog re: condo conversions here. He is in the Boston area so I am not sure if the process is the same but he could possibly help guide you. Also try reaching out to Victor Jernigan for local (Knoxville) attorneys, architects, and surveyors that may be of some help with the process. Hope this helps. Best of luck.

James 

Watch for high debt in the local governments where you want to invest. They have been know to raise taxes to pay for their increased spending. However, the appreciation in the TX markets has been great and compensated those who invested so far. Also check to see if the property has both county and city taxes. That can double your taxes as well.

As far as cash flow, you can expect around $200/ month. That's setting aside a cap ex reserve as well. A good turnkey property (like the ones provided by the Turnkey companies mentioned above)  should have thorough rehabs with all mechanicals and roofs replaced but you should still hold the reserve.

Chris A.,

My advice is to be careful of markets with high property taxes. Once you pay >2 months rent for PM (first month's rent + 10%) and >2 months rent for insurance, vac and maint expenses, there is not much left over if you are paying 2-3 months of rent for taxes. If yearly taxes are equal to about 1 month's rent you are keeping 1-2 months of rent in your pocket at the end of the year. It really adds up. Could be an extra $150+ per month.

What is the typical cap rate on similar buildings in your area? Right now it is over 14%. That with the ridiculous 2% interest seems like a great deal to me. If you can raise rents (given the strong demand) and/ or implement rubs (or put separate meters for the utilities) you could really increase the value to the property.  Good luck. 

Andrea, the meetings are on the second Tuesday of the month so the next one will be on 3/14. They will update the website soon and post the topic. @Victor Jernigan loves feedback and ideas for future topics so everyone can gain value from the meetings. Be thinking of what would help propel you fwd toward your investing goals.

I recently attended my first local real estate investors meetup here in Knoxville, TN with KnowREIA. (My excitement must have been palpable because my wife, who is 7 months pregnant, let me go even though it was on Valentine's day.) I wanted to give my thoughts about the meeting in hopes to help other local investors with their decision on whether or not joining this group would be beneficial. 

@Victor Jernigan is the founder/ facilitator of the group. He is an intelligent, experienced real estate investor and his passion as an educator is evident from the start. As his profile states, his number one goal is to help people to "think" as an investor. My favorite part of the meeting was when he explained how (using the investor part of his brain) he took a recent national news story and broke down his thought process on how to capitalize on the opportunity. He provided and explained all the material that he researched and how to take the next actionable steps.

The next part of the meeting was a Q&A discussion about renovating a flip with 3 local investors/ contractors that do multiple projects a year. All 3 were very knowledgeable and I left with copious amount of notes that I can use going forward with flips or buy and hold projects.  

I left the meeting with 5 contacts from beginner to seasonal investors. If you are a new and inspiring REI, I feel KnoxREIA is a great source to begin a solid foundation. 

BTW I am in no way compensated for this post. I just hoped to answer the same questions for other people that I had not long ago. Hope to see you at the next meeting.

A recent appraisal of my rental property valued the land at $30,000 (or about 15%). However, when I look it up on the county Assessor site it gives a value of $40,000 (or 25%). Which should I use when calculating for depreciation?