All Forum Posts by: JW Franz

Hello. My wife and I are looking to purchase a primary residence and don't qualify for a traditional mortgage because we are FT real estate investors (and therefore are self-employed). Our income consists of cash flow from rental income from 40 SFH we own and manage ourselves (none of the homes have traditional mortgages tied to them). Does anyone have recommendations for mortgage lenders who provide primary mortgage options to RE investors based on their cash flow, assets and credit scores?

My wife and I live in Tampa FL and have built a rental portfolio of 42 SFHs in the past year and a half. We have left our full-time jobs and do our own property management. We have a staff of 5 full-time rehab contractors and buy mostly very distressed properties and hold for rental income. We plan to grow our portfolio to 60 homes in the next year. 

As we grow our business the cost and time to manage the repairs on the properties is also growing. i.e. our phone rings a lot. So our question is...

Does anyone have experience using a Home Warranty company to perform the maintenance on their portfolio of homes? I found an article that some landlords pay the $400 per home a year and stipulate in the lease that the tenant pay the $75 deductible per service call. The tenant is provided the Home Warranty company 800 phone number at the lease signing.

If I run the financial on this, It would cost $400 per SFH times 60 homes = $24K per year vs hiring a contractor for $600 - $800 a week on average. $700 times 52 weeks = $36,400.

What are pros and cons? has anybody used a company they can recommend?

Thank you.

Joe and Ericka Franz, Tampa, FL

Scott,
I am a GC in FL. I would purchase a copy of Means /Residential-Repair-Remodeling-Contractors-Pricing Guide. It is available used on Amazon for about $30.

Option 2 is to pay someone.

JW

Side Question: I am new to this. How do you calculate CAP Rate and what makes a good CAP rate?

Brandon. I saw this posted in reference to another members post. The person answering seems confident in the investment based on these calculations. Can you explain his thinking? NOI? Cap Rate?

"Looks like this is a good deal. If you run the numbers on a very conservative side (10% vacancy, $1,500 taxes & insurance each, 5% cap reserve, 2.5% utilities, 10% repairs) you are looking at a NOI of $16,157.

At a purchase price of $119,000, you are looking at a cap rate of 7.37. This is good for a purchase. These figures can support a mortgage with 20% down, 4.0% interest, 15 year amortization and still have almost $400 per month left over."

Thank Brandon, nice to meet you remotely.

I saw the fileplace and made the mistake of downloading the first three I saw, I then found out you can only download three per week. The three I downloaded had little value, I will have to check back next week.

My name is Joe Franz, I am new to the forum. I live part time in Tampa FL and Eagle CO. I am currently software business exec. I am also a FL GC, and have run a home improvement franchisee for 8 years. I am new to investing in Real Estate, I am considering purchasing several multi unit structures in Tampa or Tallahassee (college area) with the goal on building monthly cash flow. I am interested if any one has a good spreadsheet to project cash flow, and also If someone can explain financial ratio with making purchasing decisions.

Thank you in advance!