All Forum Posts by: James Smyth

I've heard of the 1% rule and I wonder if it is applicable in all markets? I'm shopping in Long Island NY and it seems impossible to buy using the 1% rule in this market.

I've done some more detailed analysis of deals and it seems like 0.8 might be appropriate here; mMy analysis works like this:

Run comps for rent and determine market rent

Calculate 85% of market rent and I have my "effective rent" (deduct 5% each for vacancy, management, and CapEx)

Calculate PITI (principal, interest, taxes, and insurance)

If effective rent > PITI; property cash flows?

Hello and thanks for the quick responses.

The deal can be found here: https://tools.reikit.com/properties/3f4da16f

To answer a couple of the questions and add some context:

- This would be my second BRRRR

- I'm a professional engineer and would be fairly comfortable doing my own inspection and waiving that right in the purchase contract

- I'm comfortable that if I focused on renovating the kitchen and bath that the house could rent in for ~$2500-2600.

- The house is located in the desirable CDP of Fort Salonga. Fort Salonga is a low-density wooded development area of Long Island. The house is extremely small (850 SF) but dated which allows the taxes to be very low for the area ($4,5550/yr).

- Given the house is extremely undersized for the neighborhood, the most profitable exit strategy would be to hold it as a rental to capitalize on the low taxes in the desirable neighborhood and then expand the house right before I was looking to sell it to make it more comparable to the houses in the neighborhood (1,800+ SF).

What is the best way for a non-realtor to get the most info from MLS?

I'm looking to buy a BRRRR property using owner financing and renting it out after the first year.

I ran the financials on the deal and think I can make it work if I get the right purchase price.

The property is a single family residence that has been on the market for ~100 days, originally listed at $420k, recently reduced to $399k. To make the deal work I need to get the house for around $340k. There is another offer that went stale from COVID that was in the "mid-300s".

When I walked the property, I noticed a number of issues with the property that would come up at inspection at which time I would ask for a price deduct; I estimated this around $27k (needs boiler, new electric service, old foundation that needs demo, underground oil tank...)

Should I consider those deduction in my initial offer or should I wait until we are under contract and allow the inspection report to bring them up? My concern is my offer may be overlooked because it seems to be less than the other and after inspection will end up at the same price?