All Forum Posts by: Justin Brown

So if your maxed out with saving you need to start looking at how to make more money but not in a way thats going to leave you in a hole that will be too big to get out of. I think house flipping is very risky and time consuming. Take those same hours and do something else that makes you money by the hour thats going right into the bank. Then before you know it you will have capital to work with and you can find a duplex for your family to move into and stop renting and get a little cash flow. Then you can take the next step and the next etc. Keep up the good work! Don't settle, and write down your goals each day so that you can keep what your working for in clear view! 

Thats a good way to describe it too @Account Closed  but from a marketing standpoint its going to be hard to get someone to buy your property if you don't show a good cap rate compared to other properties in your market. 

Hey Bill, 

https://www.biggerpockets.com/blogs/4704/47953-how-to-grow-your-business-with-bigger-pockets-and-other-social-media @James Wise writes the above article, and touches on the benifits of the pro account... check it out! Thought I don't know the answer to your Plus question. 

Hey @Nick Mauldin! CAP rate is a bench mark for judging dissimilar properties, and for telling you how well its performing based on the cost of the property. The higher rate doesn't relate to risk necessarily but can help get you in the ball park on if you want to analyse a property further. CAP rate is short for capitalization rate, meaning how long till you pay off the asset cost with the net income. So lets say for easy numbers...I have a two unit property that would cost me 100K that is making me a net income of 10K a year and a 3 unit that was 200K and was making me 16K a year.

1.) 10,000/100,000 -> .10 -> 10% cap rate, or ten years to capitalize on my investment. 

2.) 16,000/200,000 -> .08 -> 8% cap rate, 12.5 years to capitalize on my investment. 

So though the two options are a lot different I can quickly see that the first option is a better cap rate even though its less cash flow. At this point it really depends on what your investment strategy is. Some people don't care about cap rate and want to look at the cash flow per door, or cash on cash return. But its still a good tool for at least giving you a 30,000 view to get you in the ball park on if this is something you want to look at. You can also use this to see what is normal for your area on what is a good deal or not. I know in some places they wont touch something unless its a 10% cap rate, in other areas they would jump at 6%. Any folks want to jump in on that part of the discussion? 

Good luck Nick! 

JB. 

Hey Steve, so your main question is should you try to leverage the fact that you have a good amount of land to work with or invest your money somewhere else? Did you get an idea of the costs of re-zoning? How much was the house? I have never heard of just the house being for sale, unless its a mobile home situation.  

Whats the context? Got a link? 

Hey @Philippe Benhamou I'm in the process of reading through @Scott Trench book, Set for Life right now and I love his concept of getting set up on the right runway. Looks like with being a family man trying to make more money you would want to start with the first step of saving your way rapidly to an emergency fund of 1-2K and 25K hard cash to work with. What type of field do you currently work in?  What are your investment goals? Maybe you have some time outside of work and family to get yourself plugged into a work related to where you want to invest. Meaning take your real estate license class, help a buddy who is a contractor on the weekends, etc. 

@Scott Trench fun discussion topic! I would put Allentown on your list! Massive development is under way that is bringing a lot of jobs and young professionals. They started with building a new Hockey arena right at the heart of the city that brings with it lots of fun night life. Now they are working on a few high rises and luxury apartment complexes. Check out the city plan called the NIZ.  Prices are still pretty low with great cash flow in the meantime, but with great opportunity for appreciation as development and construction continues. I'm also pumped about the Water Front effort that is on the horizon! 

https://www.allentownpa.gov/Neighborhood-Improveme...

You mentioned big enough to travel to also. The ABE airport is pretty decent and we are also only an hour from Philly, and just over an hour from Newark. You fly in Scott I will clear my schedule and give you a tour and introduce you to some fellow BP movers and shakers in the Allentown area. 

Here is a link to the BP calculator PDF I ran on the property. Beautiful opportunity for a house hack! Used 5% interest, 25% down, 25 year amortization. 15K repair costs. 

https://www.biggerpockets.com/calculators/shared/799536/88019c57-9ad5-456b-9319-4b8b49150e1d

Tons of potential beyond your traditional duplex. Four parcels for sale, which include two townhomes (End of row and attached second one in) and two small lots to the immediate rear across the alley for parking as many as 6 cars (a lot for downtown Allentown!) Rents are projected and conservative.  Two properties were converted into one large single family dwelling with an upstairs two bedroom apartment for family to stay in. Deconversion back into two separate homes would allow for both better cash flow (1200+1200) and appreciation. Call/Text/Email if you have questions and interest!