All Forum Posts by: Jason Barnett

I am a relatively new landlord so I haven't seen a lot yet. About the worst thing that I've seen so far was when a tenant left my apartment and "forgot" to turn off the water. The next day I receive a call from one of my other tenants that there was water in the hallway!!! The carpet and tile ended up ruined and I replaced all of it. :violin:

He's talking about CASH FLOW, not EQUITY!!!

From an EQUITY point of view you're right that's it "still there".

From a CASH FLOW point of view it's all gone!!! Cash out of your bank account = negative CASH FLOW!!!

Both of these factors are very important, but you need positive cash flow to make real estate work long term. As all cash has already said... the only reason to do a negative cash flow deal is in the hopes of cashing in on a high resale value of the home QUICKLY. That's what we call speculation (because you're betting that someone else will be the "bigger fool" and pay a premium price on the house you're buying). If you're making positive cash flow then you can hold on to the property (forever?) and then resell whenever the price is right.

Bump!

(sorry I don't have the answer, but I want to know the answer to this question as well!!!)

Reverse mortgage loans take the equity in your home and give you cash that you can spend. They're best for lower-middle class elderly people that have little savings because these people typically have a lot of equity built up in their home, but they don't earn as much in annual income (if they work at all). The money that is loaned out will be secured by the home so as a potential buyer of a home you can think of it like you would a traditional mortgage.

Biting my tongue here... I have a lot of ideas, but I'll wait until I see the tools in action. If they're as good as they sound then we may not need the Excel uploading capabilities. Let me know if you're looking for some part time help for the dev work; I can do it for $30/hr or per-contract pricing.

OK I'm hoping this finds biggerpo and he will at least consider this request. :D

I've been using the site for a little while now and have encountered a problem. I'm a financial-type and often times when people ask financial questions I'll whip up a spreadsheet to figure it out. The problem is... it's not like I can easily post all of the information from the spreadsheet into my message.

Well... I'm also a web developer and at this point a light bulb went on: jedox. Jedox is a PHP-based application that lets you share Excel files over the web and I think that you could easily integrate it with what you have on this site. The software license would cost at least $8500 USD, but I think it would be an incredibly useful feature for a site like this. Hopefully you can squeeze this into your budget?

^^^^ That's what I get also. In fact I went 3 steps further and mapped out 4 scenarios in an Excel spreadsheet if anyone is interested. In fact I am working on getting a copy of this document online so you all don't have to email me directly and ask for the document. In any case, the value in this deal boils down to 3 factors and they are (in order from most important to least important):

1. Income from Turbines
2. FCRP payments
3. Residual Value in 2035

Income from the Turbines is the most variable of your factors, but it is also the most important factor. It can add 35-39%.

The FCRP is moderately important. Because it affects your near term cash flow (the first 10 years) it can boost your return by 4-7%.

The residual value is so unimportant that you could appreciate 10% each year for 30 years... and it still pales in comparison to the income from the Turbines. Not sure how hot land is in TX, but based on what all cash said above you're probably looking at 2-4%.

Just dropping in to say hello... I live up the road a bit in the Dayton area. Best of luck to you!

BEWARE OF FUD!

I don't know much about land deals, but...

"arrears" means that you are dealing with the prior year. So you let the land sit idle for 2005 and you'll get paid in 2006. It's a cash flow thing.

Based on the numbers your seller suggests you could earn anywhere between 10% and 47% rate of return. This has to be taken with a grain of salt though because the seller is currently negotiating for the turbines which means that nothing is finalized yet. If the seller doesn't finalize before you buy the land then you'll have to do your own due diligence on the turbine thing (because that's where most of the value is in this deal). The FCRP only provides about 6% of the total return.