All Forum Posts by: Aaron Zike

Hm, that’s all really helpful feedback. Thanks everyone. 

Acquiring property in Chicago area. Does anyone not affiliated with the company have any experience with Letts Management?

So we're under contract for our second property in three months and it's been lesson after lesson (so far nothing taking our legs out from under us). Just got a hold of the ledger for this new property we're picking up and, while they have a perfect payment record, it's receiving HAP/HUD assistance. Is there anything special or additional we have to do as new owners of the property? Do we need to fill out any other applications or notify anyone additionally? I'm certain this is a no-brainer for lots of people, so any help or insight is greatly appreciated.

Thanks, James. It'd be my wife and me. That still a cake walk or does it start getting crazy with anyone else involved at all?

Currently contracted to purchase a property in Cleveland, Ohio, but live out of state in Washington. Looking at establishing a LLC and renting through that. Seeking an attorney in Ohio familiar with REI for guidance and advice.

Actually Wayne that's really helpful. I have no idea how much this type of insurance costs and closing costs rates are when doing seller financing. Poked around the forums and started another thread on it, but to no avail. 

I used the example percentages off the "how to" videos for using the calculators as my only real stepping stone, so I'm a little surprised to hear those are low, but I'm wide open to input. 

Any idea of what more reasonable numbers would look like?

So, the general numbers are like this:

Purchase Price: $635,000.00 

Purchase Closing Costs: $6,350.00 (I'm not even sure how this applies in private seller financing, so any insight to this would be extremely helpful)

Estimated Repair Costs: $10,000.00 (This is just set aside for the unexpected up front issue)

Total Cost of Project: $651,350.00 

After Repair Value $635,000.00 

Down Payment: $10,000.00 (He doesn't seem to have any big hobbies or desires for purchase, so I don't think he has much reason for any big up front payout)

Loan Amount: $625,000.00 

Amortized Over: 30 years (I'd expect the note/his will would write in to transition payment of this over to his daughter as just a nice steady cash flow that won't require any headache unlike a property sale during execution of a will)

Loan Interest Rate: 4.000% (basically right at inflation)

Monthly P&I: $2,983.85

Unit 1 Rent: $1,600

Unit 2 Rent: $1,600

ADU Rent: $1,000

Vacancy: 5% ($210/mo)

CapEx: 5% ($210/mo)

Repairs and Maintenance: 5% ($210/mo)

Insurance: 2% ($80/mo)

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First year annual CF: -$367, ROI: -1.39%

But by year 2 annual CF: $1,350, ROI: 5.12%

and by 5 years in annual CF: $6,960, ROI: 26.42%

....what am I doing wrong? What assumptions are unrealistic/unreasonable?

Tristan and Josane, I apologize for the late reply! I thought the forum would have me Follow it automatically and assumed nobody had replied. That sounds like sound advice about the RE Attorney. I'll get looking around for one right away. I'll re-evaluate my numbers as practicing definitely helps point out flaws in early assumptions.

I think my biggest concern (beyond just getting myself into a money pit) is that somehow I'd be inadvertently screwing over someone who's a genuine friend. I suppose that's where the attorney would help to point out if there are any catches that he could somehow get burned in. 

Josane, your point about some people just not wanting to make the effort is so true about so many aspects in life and was for me (and listening to the podcasts here, so many others) what is convincing me of why more people don't get into real estate to begin with. I'm a newbie, though, so for whatever that's worth lol

New investor in Tacoma, Washington and we are running through a lot of analyses, but unsure of what to use for reasonable estimates for closing costs and landlord umbrella insurance policies. Just a reasonable range for each or either would be very helpful! 

Hello fellow Washingtonians!

My wife and I are looking to make our first investment property purchase in Tacoma and we're churning through analyses using the BP calculators trying to get some practice in as well as scope the basic MLS market. The problem is I don't know if I'm making reasonable assumptions on the cost estimates.

If I'm using the "funnel method" of screening LOTS of properties, what are some good base rates that other active investors are using to cut through the chaff and get to the next tier of analysis? I realize that this largely depends on the condition of the property, but just some left and right limits would be super helpful.

Does anyone have any thoughts on this?