All Forum Posts by: JT Crownover

@Lesley ResnickThanks. That’s what I thought. 

@Michael B. @Alan Fitzpatrick I could have done a lot better job breaking the deal down in the original post, but I’m glad we got through it. 

As I get more new properties in this area I think the comps will  align more with neighboring communities which would push my property values up around $100-$120k

@Lesley Resnick Correct. The property has been appraised at $80k. I'm buying and financing at $60k. I'm putting zero down because I will be at 70% LTV. $875 is right at market norms so I think I'll have an edge because I'm new construction so, yes, low vacancy. Also, roof and HVAC will be new. I wish I could find 30 year terms but 15 is the best I can find around here from a local bank.

@Alan Fitzpatrick Thanks Alan for the reply. And you guys are really bringing my newby status to light. Let me clarify. I'm putting zero money down. Because I'm the builder I'm able to keep the loans at 70% LTV. I will simply be starting off with $20k of equity.

And thanks again. All this info should have been clearer in my original post. 

@micheal b, I don’t think it’s the best deal in the country, but it’s a starting point. 

@Eric Jacobs, these properties are all within 1/4 mile of each other, so I think I can be more efficient managing them. They will be more desirable than the surrounding homes, so I think the actual vacancies rates will be lower than stated. They are new construction, so there will be no maintenance expense in the first year, little in the following few years and very little capitol expenditures for several years. I’ll will be build the homes so this will give me a cost basis since they are new construction to accelerate depreciation, it will also allow me to know where every thing is in them for maintence purposes. They’re are many vacant lots in this are that will allow me to add to my units in the future. I think this will allow me to increase homes price in this area more inline with surrounding areas which will increase my equity simultaneously.  

The point of all that is, I think my free cash flow is going to be higher than what the number indicate and I think there is a lot of room for appreciation. 

Working on my first deal. Would love to get you guys opinions. I will be acquiring 15 units SFD at $60,000/each. They will be new construction. Around 1000 sq ft each. 3/2 and 4/2 units. We project rentals rates to be around $875/ month. Here are the numbers: Appraised Value $80,000.00 Loan Amount: $60,000.00 Expenses: Monthly P&I: $490.25 Interest Rate: 5.5% (maybe closer to 6.5% by closing) Amortized Over: 15 years Vacancy $43.75 (5%)  Repairs $87.50 (10%) Insurance $61.25 (7%)  Management $61.25 (7%) P&I $490.25 (56%)  Property Taxes $61.25 (7%) Total $813.75 (93%) Income: $875/ month Free cash flow: $61.25/ month Thanks, JT

Working on my first deal. Would love to get you guys opinions. I will be acquiring 15 units SFD at $60,000/each. They will be new construction. Around 1000 sq ft each. 3/2 and 4/2 units. We project rentals rates to be around $875/ month. Looking for any criticism you guys can come up with. Here are the numbers:

Appraised Value $80,000.00

Loan Amount: $60,000.00

Monthly P&I: $490.25

Interest Rate: 5.5%

Amortized Over: 15 years

Vacancy $43.75 (5%) 

Repairs $87.50 (10%)

Insurance $61.25 (7%) 

Management $61.25 (7%)

P&I $490.25 (56%) 

Property Taxes $61.25 (7%)

Total $813.75 (93%)

Thanks,

JT

Anybody in the South East portion of the US that would let a beginner shadow them for a couple days? Just see how they operate? We will begin to self manage about 15 units in the next few months and just want to make sure we have everything in order.

Thanks,

JT

I have gotten some excellent rates with the Mississippi Farm Bureau. It doesn’t seem like a likely option but I was surprised with the rate compared to my usual business insurance agent. 

Welcome.