All Forum Posts by: Brant Richardson

For all the people thinking about whether to get a license, that should be a pretty convincing story. Good job recognizing the opportunities.

Yeah, I think negotiation is something a lot of us here in the USA just aren't comfortable with. It feels rude. We are used to going to the store and paying what ever the price is. Shopping around and looking for sales is about the extent of our negotiation skills. The role playng negotiation in the podcast was definitely helpful for me.

Maybe rotate it and save it on your computer first. Then save it on your profile.

Will that 5% cover vacancy and all the other costs of a foreclosure?

50% rule states that half your rent will be used for expenses other than debt service.  That leaves you with $1300 to pay the principal and interest.

PITI includes principal, interest, tax and insurance. The 50% rule accounts for tax and insurance in the first 50% deduction so do not deduct PITI from that.

You could look at hard money lenders to pursue option A.

If you feel like a "relatively new investor" option B may be best if you partner with somebody experienced.  That way you get to learn from them, use their contacts to save money on the rehab and profit more than option C.

False ID, breaking and entering (with witnesses), burglary (from your tenant), grand theft (from you).  They need to cuff this guy. 

@David Cohen  It's hard to evaluate whether you "failed" with out seeing your numbers.  I definitely agree with sacrificing a substantial amount of cash flow to get into the better neighborhoods but you have to draw the line at some point, I'm not sure where your line is. 

Everybody calculates cash flow a little differently.  I would be interested to see how you get $500/mo cash flow out of a property which does not meet the 1% rule.  If you own them outright with no mortgage to pay that makes sense.  In which case the cash on cash return would be very low.

On your median rental, what is  -  rent, insurance, property tax, any utilities you pay, principal and interest (and did you leverage 80% of purchase/rehab), what % do you use for vacancy, what % do you use for maintenance?

I use 10% for maintenance when calculating cash flow.  As mentioned by others, this is probably too high as you get into homes that are very high rent but not necessarily any larger than lower rent areas.  I also use 10% for vacancy which is likely an over estimate, part of the reason for investing in better neighborhoods and school districts is to get more stable tenants.  I also pay a property manager, but it does not sound like you have that expense.

There's a pretty diverse group of properties that could be pure cash flow, some good and others not.  I buy in a area where I expect appreciation but don't plan to ever sell or even refinance, so really it is a pure cash flow play.  If you are buying in a ghetto there's plenty of problems with that.  If you are buying in a nice but rural area unlikely to appreciate, I'm all for it.  I want to build a passive income, $200/mo here, another $200/mo there, one little chunk at a time until its real money.

Joe  -  Good.  They should all drop their prices drastically to lure me in.

Rachelle- I am an out of state investor working in KC.  I will send you some information on who I am working with.