All Forum Posts by: Ryan Tyler
Ryan Tyler has started 2 posts and replied 7 times.
Post: LLC or Corporation?
- Delray Beach, FL
- Posts 7
- Votes 3
******NOT LEGAL ADVICE******
LLC's can give you the protection of an LLC (tough to reach personal assets) and can avoid the "double taxation" of the traditional corporation. (although you can lower the tax bill with smart dividend usage).
Insurance can replace the protection of a corporation to a limited extent, but you should sit down with a California attorney to discuss those issues (you can incorporate yourself)
Starting an LLC isn't that difficult but it all depends on your risk tolerance.
******NOT LEGAL ADVICE*********
- Ryan
Post: Florida First Deal Analysis
- Delray Beach, FL
- Posts 7
- Votes 3
Sorry. I meant to say that the tenant pays utilities, so I'm not on the hook for that.
Post: New-ish-bie in Delray Beach, FL
- Delray Beach, FL
- Posts 7
- Votes 3
Thanks very much! I was wondering how to do that!
Post: Florida First Deal Analysis
- Delray Beach, FL
- Posts 7
- Votes 3
My mother owns a duplex in Central Florida, and she wants to give it to me in exchange for paying future property taxes. Caveat is that I can't sell it b/c it is next to my parents house and they dont want it to leave the family.
I have a little more than 12k to spend on repairing the property. Say it takes 10K to fully repair (estimate based on comps in the area). Consideration for the property is $1.
House is valued at 47k about 3 years ago. I am going to rent it to HUD/Section 8 says that renting both sides of the property will be capped at 500 each side. Below are my numbers (I ran the numbers as if I am financing the 10k through HUD at a 30 term, although I'm just losing potential interest 2-4%)
| Purchase Price | $10,000.00 | ||
| Home Value | $47,500.00 | ||
| Interest Rate | 3.5% | ||
| Down Payment | 6.00% | of the purchase price | $600.00 |
| Amount Financed | $9,750.00 | ||
| Income | |||
| Rent | $1,000.00 | ||
| Other Income | 0 | ||
| Capital Appreciation Rate | -1.60% | per year of home value | $46,740.00 |
| Total Income | $1,000.00 | ||
| Expenses | |||
| Mortgage | 30 | year term | $27.08 |
| Taxes | 1.05% | of value of home | $41.56 |
| Insurance | $100.00 | ||
| Flood Insurance | |||
| Repairs | 10% | of the mortgage | $100.00 |
| Vacancy | 10% | of the monthly rent | $100.00 |
| Capital Expenditures | 10% | of the monthly rent | $100.00 |
| Water | Tenant pays | $0.00 | |
| Sewer | Tenant pays | $0.00 | |
| Garbage | Tenant pays | $0.00 | |
| Gas | Tenant pays | $0.00 | |
| Electricity | Tenant pays | $0.00 | |
| HOA Fees | Flat | ||
| Lawn Care | $25.00 | ||
| Property Management | $110.00 | ||
| Total Expenses | $603.65 | ||
| Cash Flow | $396.35 | ||
| Cash on Cash Return on Investment | 66.06% | ||
| Annual NOI | $4,756.25 | ||
| Cap Rate | 792.71% |
Am I missing something critical? The HUD waiting list is packed in the area, but should I account for more vacancy? Repairs? I can't believe that the cap rate could be that high.
I whipped up my own spreadsheet, so I could understand the numbers. I need someone to (gently) pop my bubble here. I have a property management company in mind, plus I have a nephew that will mow the lawn once every two weeks.
Post: New-ish-bie in Delray Beach, FL
- Delray Beach, FL
- Posts 7
- Votes 3
Originally posted by @Mitchell L.:
Welcome @Ryan Tyler
These podcasts are indeed great and you can definately take a thing or 2 out of someone else's book everytime you listen to one.. You have a great plan but a lot of the multi-families down here are just simply overpriced.. Got to dig deep on this one!!
Good Luck!
This is what I have been discovering. It is like adding the word "investor" to your listing raises the price by 50k. It will take a deep dive indeed, but something is out there.
Post: New-ish-bie in Delray Beach, FL
- Delray Beach, FL
- Posts 7
- Votes 3
Wow! The response has been great. I now know my next step. @Dan_Demott I will have to take you up on that coffee once I get back from my travel! I've got studying to do!
Post: New-ish-bie in Delray Beach, FL
- Delray Beach, FL
- Posts 7
- Votes 3
Greetings! My name is Ryan and I am an attorney in the Delray Beach / West Palm Beach area. I have done some real estate law in a previous life but now I'm looking to become an investor.
After a mini BP podcast marathon, I would like to start with an owner-occupied multifamily property and build out from there. 3-5 year plan is $2000/month in net income. I have a year and a half of experience as a landlord (house was owned by a family member and I managed it) and, while it wasn't the greatest experience, I'm very willing if it gets me to my goal. Also, I have a full time job, plus a small practice on the side, so my time is not unlimited but I'm willing to shift things around if needed.
I have not had a chance to dig deep into the forums but I will do so in the next few hours. Suggestions? The Podcast has been awesome and I am sure the site will be as well! Thanks!