All Forum Posts by: Jason Jones

I'm looking into a single family home in Ellis county, TX. Nice, rapidly expanding city. This would be my first rental property so I am trying to get started in learning how to analyze deals. I would plan to self manage. Below are the details:

• About home: $220,000, 3br 2ba, 1,350 sqft, 8,400 sqft lot, assuming 3% appreciation per year. 
• Down payment: 20%, $44,000
• Closing costs: $5,000
• Upfront costs to get rent ready: $2,000
• Reserve cash to hold for this property: $10,000
• Interest rate: 3%
• Estimated rent: $1,600 +- 100, 3% increase per year

Expenses:

• Vacancy rate: 5%
• Property tax: $3,750/yr + 2% increase per year
• Insurance: $1,000/yr
• Annual CapEx: $3,000 + 3%/year

Return:

• Annual Cash Flow: Year 1 - ($238), Year 2 - $59, Year 3 - $366, Year 5 - $1011...
• Compound ROI: Year 1 - (11.42%), Year 2 - 2.97%, Year 5 - 10.49%....

Looks like most of the value comes from equity growth and hopeful appreciation of the property and not much on cashflow until may years in the future. Rents aren't high in this area so it is hard to imagine finding a property that has good cashflow from day 1. Does anyone have any thoughts on if this is a decent deal or if they have any advice on how better to look at it?

Thank you,

Jason

I have been looking for brokers that can help me find profitable properties to invest in, particularly in California. I have been looking at Lee and Asssociaties and a lot of their properties have a lot of information on the cash flow potential. Many already have fully occupancy on multi family homes.

I think this would help me with making my first deal. Does anyone have any that they have worked with and would recommend?

Thank you,
Jason

Thank you to all who responded. I have learned a lot from your responses @DavidBeard and @Michael Lauther. I am very interested in investing in a local area that I would be able to personally manage. However, I can't find any properties that follow the 2% rule. I have been looking in Temecula, Menifee, Riverside area. These are areas that a lot of people are moving to and experiencing a lot of growth but they are no where near following the 2% rule. It's time for me to do some more market research!

Hello,

I am looking for a bit of advice as I prepare to buy my first investment property within the next 6-12 months. I have been looking for properties in Kansas (Wichita and Kansas City) because they seemed to be profitable for renting.

Let me lay out an example property that I am looking at to see if my logic is sound.

Property: $42,000 3br/2bath 1104sqft in Wichita
http://www.zillow.com/homedetails/1224-W-Dooley-St-Wichita-KS-67213/77366358_zpid/

24% down = $10,800, 30-yr at $145/month
The rental range in the area is $531-783/month

RENT: $531/month
TAXES: $43/month
MORTGAGE: $145/month
INSURANCE: $73/month
PROPERTY MANAGEMENT: $45/month
-------------------------------------------------
INCOME: $225/month

I was planning on adding an additional $50/month to the mortgage payment.

The rest of the income I would save for any home maintenance.

Is this correct thinking, and would this be a good investment?

Thank you,
Jason

I have been reading 'Investing in Real Estate' - http://www.amazon.com/Investing-Real-Estate-Gary-Eldred/dp/0470499265

There is also a 7th edition that has come out. I found the Rich Dad, Poor Dad series to be great as well. However, 'Investing in Real Estate' is a much more in-depth review of the subject. It dives much deeper into many topics.