All Forum Posts by: Jasraj Singh

definitely dont need a license.....i work with a couple out of state investors.....let me know if i can add value to you too

Kind of amazing that anyone from anywhere can buy property in the United States.  I guess many countries are like that. I don't notice too many us people investing in overseas or people from other countries investing in the US.  In US have to pay the Real Estate taxes & probably have to use cash vs. bank financing.

You can buy and sell your own properties, and manage your own properties without a license.  You need a license to manage or sell other people's properties.

the one exception, in CA, anyway, is if you are the on-site manager and only manage that property for someone else, then you don't need a license.

No.  For rentals, you definitely don't need it.  For flipping if you are going to do a lot, it might save you some money on commission, but you can also do for sale by owner when selling.

Jasraj,

That's solid advice from @Nathan Gesner. 

Once you analyze numerous properties, and own a few, you'll have the knowledge to adjust from the "rules of thumb" and create your own way of analyzing rentals. 

Don't worry about analyzing 100% accurately on your first property (cause it's almost impossible). It doesn't matter if your first property makes you a very low financial return, because the educational return is invaluable. 

Best of luck!

https://www.biggerpockets.com/blog/easily-analyzing-rental-properties-four-square-method

Brandon has a ton of videos on BP and YouTube, as well as a weekly podcast, where he walks you through the steps he uses to analyze a property. It's really not difficult and you'll have it down after a couple tries. If you want to get ahead, you need to put the effort in and practice.

There's no magic formula for calculating vacancy rates. You'll have to guess for a while until you build some experience. Most people estimate 10% vacancy rate. I manage 350 rentals and typically see less than 5% vacancy but it's sometimes higher and sometimes lower depending on the type of property. Experience will enable you to dial that in more accurately.

@Jasraj Singh

It depends on the type of property. Let's use a 3/2 SFH. Don't worry about the cap rate it's only relative to 5 units or more. Vacancy is based on your area. If you are in a high demand rental area it's going to be less. I generally use 8% and adjust based on the area. 8% is one month out of a year it's vacant. If most tenants stay at least two years then reduce to 4%. I wouldn't go lower than that. Most of my tenants stay 4-5 years. If you put down 20% on a rental than CoC is your calculation. If you put 20K down and the property cash flows $250 per month your CoC is 15%. It's your all cash in on a given investment minus cash flow. In this case annual cash flow of $3000/$20,000 = 15% CoC. ROI would be when you sell it. Some investors use CoC/ROI as the same number for a cash flow property. It's your metric.

Calculating your rental market for how much rent to charge takes research. Use Zillow, Trulia, Hot Pads, rentometer, etc to look at the competition compared to your property. If you have access to the MLS use that as well.

Cash flow is rental income minus all expenses which includes mortgage, property taxes, insurance, vacancy, repairs, property management and capex.