All Forum Posts by: Jim D.

Hello all. I have been browsing the forums and researching REI for a couple years now, and I finally think I am in a financial / knowledgeable position to get my hands dirty.

If someone can point me in the right direction of getting started on purchasing a smaller single family / duplex rental property in the greater Nashville area, I would appreciate it. Thank you.

Hello all. I currently own my home, and have accepted a new job out of state and will be moving in 3 weeks.

The house will need a small amount of work before being move-in-ready: some patch-up work after a kitchen renovation and some HVAC updates.

I plan on making those renovations in the near term and then either selling or or renting. I can make the mortgage payment in addition to my rent payment living outside of state, but it will be tight. Someone suggested rent-to-own as a way to sell with relieving the mortgage burden.

I'm sure you need more information to help me out. Let me know what more you need, and I appreciate your input. Thank you.

REVIT is changing the industry big time.. amazing tool when used correctly.

Thanks guys. These are great replies.

Paul, I should remind you that I'm a newbie in REI. But I have been paying attention to the "East End" neighborhoods for a while now.

These neighborhoods make up the south east part of the city. The great majority of renters are young professionals from mid 20s to mid 30s. I have many friends who live in the area, and mean rent per bedroom for multi families seems to be right around $500/month. The houses in this area can be had for anywhere between $100k and $300k.

Something to consider: combined property/school taxes are something like 3.2% of assessed value for 3 unit houses and smaller. After that, your paying a larger non-homestead rate which is above 5% I believe.

Hope this helps.

Max, you bring up a great point. I should have mentioned that I assumed that the property value would hold constant in my example. Also, property values in Rochester are extremely stable.

My current plan is to buy a duplex and rent out one of the units while I live in the other. In a few years when I finally settle down and start a family, I can see myself holding onto this property as a rental.

Thank you for pointing my typo out to me Vikram. I meant to use $2,000 in my example.

I found the equation for ROI here: http://www.rentalsonline.com/landlords/rental_property_roi.asp

I read their definition of ROI and it did a great job of confusing me. I would be more comfortable with their definition it didn't include principal as an expense.

As I understand it, ROI = (Cashflow per Month * 12) / (Total Equity)

I'm having trouble understanding why principal doesn't count towards monthly income in this equation. For example:

I buy a rental for $100,000 with a $2,000 Down Payment. Total cashflow is 0. Therefore, my ROI = 0%.

However, during my first year of ownership, the $2,000 I invested doubled to $4,000 because my tenants' rent has been paying the principal on my loan. Isn't this a 100% ROI? My $2,000 made me an extra $2,000.

Can someone clear this up for me? Thank you.

Thank you for the responses. I think will be better off investing now: I will have the opportunity to make a greater return on the investment than paying off loans, and the sooner I start making mistakes, the sooner I get to learn from them.

Also, Rochester has very stable real estate market.

2.375% sounds incredible. I have a private loan at 8% I believe and a few state and federal loans averaged around 5%.

I'll be looking into consolidating.