All Forum Posts by: Ken Martinez

I ditto Andy because Redfin is a great site, plus they give you their estimate based on price per square foot which is a good free estimate.  I usually confirm with Zillow and eppraisal, and finally with realquest, again all four are free.  It has been my experience that when all four free websites agree, the estimate is very good.  The problem is only when they don't agree.

Steven

If I understand your numbers, let's say the balance is $50K. Then you are buying at $30K (40% discount), and the house is only worth $45K (10% discount). So now you are buying at 67% of value which is high with no seasoning and no warranty. You mentioned FC, well let's say you needed to FC and re-sell to get your money back, how much protective equity do you have? I use 85% of FMV as my quick sale price and to handle closing costs. Assuming you have no other costs other than your stated $5K (a big IF), your protective equity is 45K*.85-5000 holding - investment 30,000=3,250, which is not a lot of wiggle room to protect yourself. You need a bigger discount like Mike and Bob said.

Mike, let me know what you find out because I am interested in the same thing as I would like to develop a way to visualize this information as well as analyze.  I plan on using Tableau which is a great software tool for visualization plus already has built in maps of entire U.S. along with lat/lon for all major geographic markers.  If you ever want to talk data, let me know.

I think the other thing to mention is that after you put in your percentages of 10% for management, $100 for Cap Ex, etc., you should look at how all these numbers interact together on your rental income statement so you can get a final annual estimate of your CFBT cash flow before tax.  Then you will know your cash on cash return to buy your rental and determine if this meets your desired goal.  Whether it is 5 or 10 or whatever percent, no right answer here other than are you happy with the result compared to your goal for the house and factoring risk and your time to manage the property.

#1 says it all, thanks.

Tera above has a great list, but I just finished reading "The Millionaire Fastlane" by MJ DeMarco and this is one terrific book.  Not a real estate book (although mentioned) but really mindset and the best paths to follow.

I created an Excel spreadsheet version of every possible calculation I could think of that a Real Estate and Note Investor would want, including 10bii functions.  I just got tired of going to different websites or trying to read a tiny number on my phone.  Hope you like.

http://www.easyrealestatecalculator.com/

Joe, before buying non-performing notes, I would educate yourself as much as possible first by reading as much as you can here on BP, attending either or both of the major Note conferences in Las Vegas (Noteworthy and Paper Source), attending Meet-Ups and RE clubs specific to Notes where you live.  Invest in Debt by Napier is a great book, and Performance Anxiety by Gordon Moss is another great book on 2nd liens.  Hope that helps.

You can go to either of the two big Note conferences in Las Vegas, Noteworthy and Paper Source and both will have Vendors with product to buy in addition to plenty of investors to buy from.  I have been to both and I would say they are well worth your time.

I would add the 70% rule only works in the mid-range say $100k-$300k range. The lower the price of the house or the more expensive the house under and above that range, then the 30% factor ends up being not enough or too much. For example, won't work in Detroit or Beverly Hills. You might want to look at the Fixed Cost Method = MAO = ARV-fixed costs-profit, where fixed costs and profit are hard $ dollar amounts, not percentages.