All Forum Posts by: John LaMedica

@Curt Davis  What makes you say that long term these cheap homes always turn out to be a loser?

@Lisa Phillips You said you always follow up with DRIVE when you promote/share this strategy. What does DRIVE stand for?

Very generous of you, @Phillip Dade! May take you up on that at some point. 

And thanks for your perspective as well. Didn't realize Tucson was ranked so high in forecasted growth. Will be interesting to see how the recent law passed that increases the Arizona minimum wage from the current $8.05 to $12 by 2020 (plus one week of paid sick time, etc.) will affect affordability and, more importantly, growth. It would seem we are putting ourselves at a disadvantage against business-friendly states like TX, NV, etc. 

Thanks, @Simon Wold and @Kristie Eddy! 

Kristie, I'm new to this as well, but from what I've seen, it's rare to find a 2% deal (or anything close) in Tucson, whereas in the Midwest much more common. The counter-argument to the Midwest seems to be that you won't see any appreciation, although if out-of-state investors continue to pile into those markets chasing yield, it's hard for me to see how prices won't get bid up. (I'm curious to look on Zillow to see to what extent, if any, this has already happened.) Perhaps more to the point, though, I don't think appreciation is a given anywhere at this point, so you could also make the argument that Midwest prices have less to fall. 

I agree, though, that there is something very reassuring about buying in a place you have boots-on-the-ground familiarity with (esp. when it is your first property), so these are all factors I'm currently weighing. 

Thank you, @Paul Lachaud, very helpful!

@Simon Wold and @Kristie Eddy, Didn't realize that Tucson was on the radar of out-of-state investors. Genuinely curious what makes you choose Tucson out of all the possible places in the U.S., especially when much better returns can be found in the Midwest, for example. If you feel like sharing, would love to hear your thoughts/perspective :) 

 @Paul Lachaud and @Account Closed, Those spread sheets you posted are a great tool. I'm new to this. Where did each of you get those from?

@Account Closed I've used a flat fee listing service before, but it was a lot more than that if I remember correctly. Who do you use? 

Thanks, @Scott Hollister. I just updated my original post cause I screwed up my initial calculations. 

As far as inflation causing the increase in cash flow, according to my calculations, it does account for ~$56 of the $300 increase after five years, but I'm still not sure where the rest of the increase is coming from.  (In the vid, Brandon tells the calculator to account for a 1% increase/year in income and a 1% increase/year in expenses. That's how I was able to come up with the $56 number.)

In the BP vid below, Brandon is analyzing a rental property for cash flow and says that his cash flow will go from an initial $1200 to $1500 by year five, then to $2000, then jumps to $9.5k once the loan is paid off. Can someone help me understand what causes the cash flow to increase BEFORE the loan is paid off? 

He did estimate that his income would increase by 1% per year, but that's only an extra ~$20/year, or an extra ~$80/year by year five, so that alone cannot account for the $300 increase in cash flow achieved (i.e. from $1200 to $1500), esp. since he estimated that his expenses would ALSO increase by 1% per year. 

 https://www.youtube.com/watch?v=hrOR9mYk0Vs&list=P...