All Forum Posts by: J K

Great Forum Folks.. Keep the info coming.

Over the past 3 years, I have purchased 3 properties, 2 are rentals and one is my primary residence.

With no plans on stopping, I am now looking into ways to better position myself from a legal perspective. Can anyone provide me with guidance on Trusts and other forms of asset protection vehicles.

I would like the ability to have my property assests seperate from my personal assets in the event of being sued or other negative situations.

Thanks

I am in the process of purchasing a 2 bed, 1 bath 1000 square foot house on Cape Cod and have run all of the numbers. The final number Im looking for advice on is vacancy rate. I know this number could be 100 or 0, but what is everyone using as a sample rate when trying to determine if a deal makes sense?

jgfichte,

Including tax and insurance, what have you held for a month for expenses. You state that you feel 50% of rent is too high. Just curious to see what you feel it should be based on your rentals.

Guys,
Thanks again for these tips. I am working running these numbers using the 50% expense number and the properties I was looking are dont look as good as I thought.

Being that my brother has rentals in Georgia, I understood the importance of having cash to pay when the property is damaged or needs normal repair.

Because of the listing requirements in Mass, I am able to get last years tax payment and I also ask the realtors for last years insurance, so I am taking the monthly rent, cut it in half (50%) and then subtract my monthly insurance and tax bill and am now using that as my "Misc" monthly expense. So as an example, my rent is $3000, so my total expense is $1500. I subtract a payment for tax of $400 and $200 for insurance, My misc expense line item on a monthly basis will be $900.

One question I have is what is a comfortable number for a profit I should be looking for after my expenses. The properties I am looking at right now are slightly in the red on a monthly basis using this formula. Now being that I am in the Financial industry (and have common sense) I understand that you never want to be in the red. With that being said, I also know that the montly expense may or may not be used. I am assuming, based on your past posts, that I should just assume that even though I dont use it in month one, to be safe, assume that I will use month 1 and month 2s expense allowance in month two (if that makes sense).

Great tips. Thanks. This is exactly the info I am looking for.

Thanks for the great tips. One question I have in regards to the expenses. When you say all expenses, excluding mortgage payment will be at least 50% of the rent, are you including the taxes and insurance in this number or is the 50% on top of the insurance and tax. While I understand these are expenses, in my previous postings I was already accounting for these outside of my maintenance expenses.

Thanks again

Thanks for the advice. I am looking in eastern mass and have been seeing multi prices drop significantly. I am currently running monthly numbers using the mortgage payment, insurance and taxes like you said. One thing I am struggling with is incidental repair figures. Obviously this number is a variable figure, but what do you feel is a good number to use in terms of a minimum on an annual basis.

I guess what I am saying is can you for sure know you will spend 3K (just a example) a year in fixes/improvements.

How do you feel about section 8 housing. Have you had good luck with it. I know something about it because my brother owns rentals in Georgia, but Im not 100% familiar with the program. Could you elaborate a little. Did you buy your buildings already section 8 approved or did you make them section 8. If so, what was the process?

Thanks again

I was wondering if anyone had an opinion on owning a property without owning the land. A little background:

The property is located on Cape Cod Massachusetts which is very busy in the summer. The property is a cottage. I am considering buying this cottage because the price is low and there is good rental income, plus when not being rented, I could use it as a vacation home.

The only thing that concerns me is the fact that the association owns the land and you pay association dues. What I need to find out is if it is like a condo where the land is actually owned by the owners of all the units (ie a 10 unit building each owner owns 1/10th of the property) or if it is like a mobile home park where the owners lease the land and have no land ownership rights.

I was wondering if anyone had any opinions or experience in this situation.

All,
First post for me but from what I have read thus far, this forum is great.

I live and work in Massachusetts in the Financial Service industry and have amounted a small (>100k) in cash over the last couple of years. Over the past three years, I have been wanting to purchase a 3 family home as an investment. I do not plan on living in the building, but renting the all three units. Im not in a huge rush to purchase, but with the decline in the overall real estate market, I am starting to see multi family's for prices they haven't been at in 5 or so years.

The short of it is, I am looking for advice on purchasing multi family's for a long term investment. I have the financing all in line so Im looking more advice on what to look for in a multi-family, where one could run into issues (zoning, repairs, etc) and what is a good annual rate of return on the rents vs expenses.

All and any advice would be appreciated.