All Forum Posts by: Jennifer Wood

Hi Ko - yes, it will, but I am thinking of any initial capex expenses that may be needed before we have the chance to save up from anything coming out of the rent as expenses.  

Thank you for the reply.  I was thinking $100k because I'm imagining all kinds of capex expenses coming up and want to ensure I have enough reserves to handle them.  I've budgeted some for capex as well as repairs based on the terms I know about (we are still working that out).  How would you suggest I handle an expense like let's say new HVAC system is needed a month or so after we close the deal on the portfolio?

We have the opportunity to buy 12 single family units that are already rented through a portfolio with seller financing. We are still in the early stages of setting terms and we are out of state so haven't seen the properties (our agent has seen a few). They are in good condition but will need work as time goes on. We have the down payment and can make the mortgage payment to the seller. What we do need is funds in reserves for any capex expenses in at least the first year. What is the smartest way to find this? I'd rather not tap into my own homes equity as I want everything to run through our LLC. I am thinking we will need $100k in reserves but really don't know. My husband and I have W2 income and excellent credit and no debt except our mortgage. Would appreciate any advice/thoughts.

That makes sense Michael - thank you

Thank you so much!  These were not our top 2 priorities but we're in the process of doing our due diligence and knowing all of the major and minor things people think we should look at will help us make sure we don't miss anything.  Most of what's on your list is on ours.  

My husband and I have an opportunity to purchase a single-family rental portfolio in our out-of-state investing market that is owner-financed. While the units look to cash flow, for the next 5 years we plan on using that cash flow for any extra expenses over and above what we would forecast for the maintenance, repairs, and capex items for the properties since we already have W2 jobs we plan on keeping for at least the next 5 years. This is in the early stages so I don't have a lot of info to go on right now.  We have a solid team that can support us in this endeavor but I would welcome any guidance those of you who have done this may have:

1 - What are the major pitfalls that we need to be aware of with doing something like this? We plan on having an attorney look everything over, doing this under our LLC, etc. What are the major and minor things those of you who have done this either looked for, or wish you looked for?

2 - Would you recommend purchasing a home warranty package (like American Home Shield) for something like this?  Is this even possible?  We are talking 15+ properties.  The only experience I have with home warranty packages is using AHS for my primary residence and it has been worth it for us.

Thanks for your time!

Hi Shawn - yes you are correct, it's just a template to know what kind of deal to even look for.  I will use GC scope of work, lender #'s, etc when I find one.  And I too won't be looking at things less than 25k in profit.  That being said, I am having such a hard time making even these "guestimate #s" work.  It's like I need to find the deal of the century.  I guess if it was that easy everyone would do it.  I appreciate you taking the time to give feedback!

Thank you, Jacob.  Can you tell me why you would do 65%?  I did that and it made my profit grow, but I didn't see any other changes except I had to buy the house at a lower price.  Is this why you recommended it?

Hi - hoping some of you can let me know what I am missing or calculating incorrectly.  I hope this is easy enough to read but if it isn't, I can likely link the Google Sheet.

You should win an award with most thorough and easy-to-understand response Jonathan.  Thank you so very much!