All Forum Posts by: John Joseph

@Kevin Sobilo I apologize for taking so long to get back to you. I have been off the grid celebrating an anniversary. Thanks for taking the time to help me understand the report. Your input-- especially on #1-- was really helpful. Seeing a CoC of -651% had me thinking I was stepping into a terrible deal! Now I understand why expenses and cash flow are identical (other then cash flow being negative). That makes total sense. Thank you!

Friends,

I am looking to purchase my first property. Would you mind taking a few minutes of your time to help me understand the report I've linked below? Specifically I am trying to understand the following:

1. In the summary of the report at the top of page 1 the monthly expenses, monthly cash flow, and cash on cash are laid out in an 'X/Y' format. What are X and Y in each of those three categories? For instance monthly expenses is '$27,565/$1938', monthly cash flow is '-$27565/$62', and CoC is -681.7%/Inf%'. What are each of those numbers and where do they come from? Note, I am not asking what expenses, cash flow, and CoC are. I understand those concepts. I am trying to understand the specific numbers I am looking at.

2. In the sidebar on the first page under the section labeled 'Acquisition', the down payment reads $0 ($85000 surplus). Where is the $85,000 surplus coming from, or what is it referring to?

3. Again, under 'Acquisition' on page 1, 'total cash needed at purchase' is $45,000. How is that being calculated?

Obviously, this is not a good deal, but my biggest concern is that I don't yet understand how to read the report. Thanks for any help you can provide!

View report

*This link comes directly from our calculators, based on information input by the member who posted.

 Thanks for the rec @Mo Karim 

Will do.

 I'm about an hour from Frederick so it's def within driving distance. I am just starting out...no rentals yet. Hoping to purchase my first ASAP. I already own a primary and have 4 kids so house hacking isn't an option right now. 

Thanks for the heads up, Steven. Those areas are on my radar. I'll be sure to take a closer look at them. If I'm not mistaken, you lead a meetup in the Columbia area, right? When is the next one? I'd love to join and meet in person.

 Super helpful. Thanks, Russell.

 I'm in the DC Metro area, so I'm only looking at a small portion of Maryland. Basically everything within or just outside the 495 beltway. When you say 'if setup correctly' in reference to a single-family home, what do you have in mind? Renting out individual rooms? Air bnb it? Other?

@Paul De Luca

Thanks for your response, Paul. I figured that was the case. In terms of analyzing, I haven't yet met with a local investor but plan to attend a meetup soon in my area. To this point I have been relying on Youtube videos walking that walk through the process. 

I'm on the Maryland side of the DC metro area and am finding in my analysis that not even the cheapest listings on the MLS are cash flowing. The properties I am targeting are all under $200k (which is rare in this area even for distressed properties). The inability to cashflow seems to me to be the result of two things 1) Low rent prices relative to the purchase price and 2) current interest rates. Is anyone else seeing this in their markets? Even in nicer markets like Annapolis the average rent is only $2000/month, which creates a really low purchase price ceiling. In this market if I am looking to rent a single-family home the old-fashioned way is my only hope to cashflow finding a super distressed property off-market?

Thanks for all the input. I really appreciate it. I have come across lots of arguments in favor of LLC's online (protection against lawsuits) but felt like it wasn't necessarily needed at this point.