All Forum Posts by: Kathleen R.

@Wayne Brooks The numbers are tight and I wasn't sure if I wanted to share them with everyone. But it's a learning experience and for my current situation it helps me get one step closer to my financial goals.

Here is my 2-year plan and numbers: 

Currently, I am in debt: I have 0% interest on my current credit cards and have 18 and 21 months (two different cards) to pay it off before the interest is jacked up. That is going to cost me $700/mo (after 18/mo I pay $300/mo) to get this all paid off. 

When I move into one of the units, I will be paying half what I normally pay in rent, saving me $900. That money is going to pay off my debt. The extra income, the building brings in will be set aside for repairs, vacancy loss, and savings to buy another building.  I have two years to go before I have no car payment and no credit card debt. 

Once I move out of the unit, I will rent it at market value, hopefully, it will be higher rent at that point. If I feel the market has increased at any point, I will have an appraisal done and hopefully, remove the PMI.

The owner is paying for closing cost and pre-paid fees/expenses. 

I don't know what the trash or water bill will be...I am guessing on those numbers. 

@Luke Grogan Thanks for the input. You're right...the units don't need anything and the current tenants pay on time and keep their units very clean. So, don't touch what's not broken and just keep my replacement reserves account building up for when I do need to make a repair/improvement. 

@Roy Oliphant I like that idea... I haven't found anything for free with many added benefits.

@Brent Coombs I agree. I was going to use 0% interest credit cards to do the repairs but I will instead save the money and live in one of the units while I save up down payment for another investment. 

Thanks. 

@Brent Coomb

@Ned Carey

I calculate 

CCR = cash return/cash invested

ROI= Net operating income/purchase price

NOI = Gross income-operating expenses

@Wayne Brooks  

I hope I'm crunching numbers correctly... 

Purchase price $350,000

Equity In $12,250

$337,750 @3.25% 30yr 

Gross Income $40,800 

Operating Expenses $11,750 

If I put $40k into the building my numbers are 

Equity In $52,250

Gross Income $49,200

Operating Expenses $11,750

I also figure a 10% vacancy loss and 2.5% replacement reserves into my numbers. 

The area has signs of improving. It is in a great location. The current tenants are very clean and take care of their units. 

Hey BP -

If I invest money into the rental units I have my ROI will increase to 9% and my cash on cash return will decrease to 24%. If I leave the rental units "as-is", I will get a 7% ROI with 50% cash on cash return.

What is better? Do I leave it alone or do I put money into the property? 

@Alice K. Thank you!!  I love google drive and that is what I currently use for my short term rentals. Have you used QuickBooks? I don't think my spreadsheets and notes are going to work very well when my portfolio grows. 

@Tyler Hodgson  thank you! 

@Hersh M.  Why can't I scale up being my own PM?  I am hoping the tenants aren't a hassle...I think it is worth the sacrifice to learn about managing a property hands on.  When I have a large portfolio or if I am not local, I will hire a PM but it seems silly to pay for a service I can supply to myself even if it is a little bit of a hassle. 

The 4 plex will be around an 7.5% return on my investment if I didn't live in one of the units. That is with a replacement cost of 10% and vacancy loss of 10%