All Forum Posts by: Brant Richardson

@Luke M.

Yes, most people want a minimum of $100 per door for the effort of dealing with tenants. Per door meaning per unit, one single family home being a unit. You have a property manager dealing with the tenants and you still have $100/month cash flow so you are doing quite well. That would be a good property, actually very similar numbers to my investments in Kansas City. Your property tax is higher than mine, hopefully that means a higher property value but maybe your area just has higher tax. What is the after repair value on it?

It looks like your analysis is pretty good overall.

For a really quick and surprisingly accurate analysis there is the 50% rule. 50% of rent minus P&I equals cash flow. 950/2-329= 146/mo. It does not take into account property management so 146-95 = 51. It is a quick screening tool to see if a property is any where near cash flow positive. Before buying you would use real numbers.

With my lender, the insurance has to be based on replacement cost. The lender wants you to be covered to have a similar structure built in case of a catastrophic event.

$3k improvements - you need to see it before you can say that.
$2k closing costs - I'm thinking double that.
$600 Insurance - 600-750. Make some calls and find out.
You don't have any repair costs. I use 10%.
2 months utilities - you have that in their for during vacancy? I use a vacancy rate of 10% so I figure between that and repair costs, uitilities during vacancy are covered.

Cash flow 950 - 95(PM 10%) - 95(vacancy 10%) - 95(repair 10%) - 176(property tax) - 60(insurance) - 328(P&I) = +101/mo

yearly 12*101 = 1212 It will likely be better than that with less repairs until you get hit with a big repair like a new roof, then you will be happy you were saving up the 10% in repairs.

You should definitely listen to podcast #56. They get into tax liens and it is much more passive than running rental units.

I'll be holding on to a dozen surfboards, surfings my true passion. Holding all the fishing gear and scuba equipment, can't let go of snowboarding stuff either. But the boat is going, its a good chunk of cash and a monthly drain. It's pretty nice having a good friend with a boat.

If you can get new acquisitions which would cash flow better and you need the capital to do the new deals then sell. $340k for a rent of $2700/mo are not real attractive numbers for a buy and hold. Your actual numbers of 200k for $2100 looks a lot better, if you could sell for $340k and get into another for 200k again then its a no brainer. The main reason I would stay in would be a strong belief in appreciation which it does not sound like you have at this point.

So to live in half of a duplex you owned you would be at -$1600 or you could stay at your current rental for -$800.

Doesn't sound like you are in that great of a rental area. You will need to hold out for a serious bargain that will need rehab.

I think your original duplex idea sounds perfect but it depends on the numbers. What would a good deal on a duplex look like in your area?

Is it possible to find a place with a big walk out basement you could finish and rent?

If it is changing from 75% financed to 70% financed, do they want you to pay the other 5% down now?

Yes, you include down payment, rehab and closing costs in the I of ROI.

The 50% rule says that you will get roughly 50% of the rent as cash flow minus mortgage payments. If you are buying in cash then $350 would be right. Once you have a actual property in mind you should plug in the exact numbers for property tax, etc rather than using the 50% rule.