All Forum Posts by: James R Dean

A couple things jump out. One, it's already rented, but your vacancy rate is 10%. I would drop that to 4-6%. Also, I don't see HOA fees. Most townhouses have those so just making sure you didn't overlook that. $155 isn't a bad start, but would expect that per door. See if you can transfer trash and water over by the lease renewal at least to lower overhead. Also no PM fees could come back to bite you later. Let the numbers set your offer price, don't project what they may be expecting. Check rental comps and sold comps in the area to see if the numbers are in line with what you are using.

The problem with HELOC is its variable and raise quickly in an inflationary period as we may be going into. It's not a bad way to get quick cash, but have and exit strategy along with it in case interest decides to start moving up. Try to buy 70 to 80% below ARV if possible, so if you have wiggle room to refinance if needed.

Kristi, it looks good on paper but some of your cost expectations may be too low for safety sake. You have your vacancies at 2% and maintenence at 3%. I like to figure at least 5% vacancy which is only one month every 2 years. Also maintenence at 3% is probably low unless it's completely updated and fairly new property. Again, I would plug in 8% minimum and 10% maximum and see where it's at. Capex at 5% would work again if it's mostly updated and property built within the last 20 years. Better to be conservative to start and bank more than expected than be surprised by a big expense with no way to cover it.

Good luck.

Hi Jeanette, I'm from Illinois north about an hour from st Louis. Closing my first in a small town in 2 weeks. I know a little about st Louis, very little maybe, but I'll help if I can about some areas. 

I would agree with Evan, your insurance, Capex and maintenence seem low. Haven't had to deal with hoa's so I can't say what Capex and maintenence should be there. But very confident insurance won't be $60 per year. 10% COCroi looks good, but numbers may be skewed to get there. IMHO

An LLC will not help get you a loan. A new LLC will need a personal guarantee from an individual regardless of employment history, age, or credit rating. I would look for a local community bank lender, explain your situation. A solid job in the medical field may help Worse case, find a cosigner for first 2 years and go from there. I would also recommend an umbrella policy over a LLC just starting out for liability coverage. Good luck.

@Marion Lollis I'm 10 years from retirement myself and just getting started in Greene county. I'm looking at a sfr for 30k, 2bd 1 ba, vacant for 6 years fsr, looks in good condition. After purchase, I plan to rehab kitchen and bathroom mostly and all new windows. Adding 3rd bedroom, maybe bathroom. Budget around 15 to 20k.