All Forum Posts by: Account Closed

Don't know which market this is located in, but the only thing I'd be consistent of is making sure you're conservative on the rent. 1,600 in rent seems high for an 83k property but I could be completely wrong. This amount would be the one to most likely skew your ROI and CoC return amounts.

@Troy StuderFirst thing I see off the bat...I'm noticing your cap rate is getting calculated incorrectly in your excel template. Cap Rate should be the NOI of 10,142 divided by your purchase price. 19% is higher than what it should be based on what I'm seeing.

I tend to look at Cap Rates and use those to estimate property values. For example, if cap rates in your area tend to be 8%, take your NOI of 10,142 divided by the 7% Cap Rate to get a property estimate value of 144,885. I'm not sure what cap rates are in your area, but a realtor or property manager in your area should know that off the bat. Cap rate lets you compare properties apples-to-apples bc it takes the financing assumptions out of the equation.

I definitely would start with the BP Webinars. The key with anything is practice, and the more deals you analyze in a certain area, the better feel you get for what a good vs bad deal is. 

BP calculators are helpful when you're getting started as well. If you're looking for good excel-based analysis tool so you can analyze an unlimited number of properties, check out the link on my BP profile for one that I built. 

Hey Fran. I built a template that might give you the information you're looking for. It doesn't have a chart for ROE but it shows a chart with Annual Returns and your Cumulative Equity in the property at each year. It would be pretty easy to add a formula along the bottom of the Pro-forma chart dividing your Return each year over your Cumulative Equity in the property and seeing in which year that number peaks. Much more affordable as well. Check out the link in my BP profile.

Hope this helps!

@Seth Terramane

I recommend running your numbers with the assumption that the unit you are occupying is rented at fair value. That way, if you need to move out in the next few years, you know what you can expect the property to make in income. You don’t want to find out when you need to move that your property will not cash flow if you leave.

In terms of comparable rent estimates, your real estate agent should be able to pull that for you pretty easily. You can also look at trulia, Zillow, Craigslist,etc. Try to look at what has already been rented instead of current rental listings. Pay attention to how long rental listings have been on the market. If it’s been listed for awhile, they are probably asking too much for rent

Hope that helps!

@Aaron Gilmer whats up bro!! best place to meet anyone in real estate is through RE Meetups.  There's a few in the Boston area every month

Hey Devon,

Welcome to BP! I also live in Somerville right now and am actively looking for my first property with an FHA or Masshousing loan. There are a lot of meetups around the area. I just went to one last week at Lucky Strike in Assembly Row. I would also recommend looking at Meetup as well bc a lot of the events don't always get posted to Biggerpockets. Happy to meet for coffee whenever!

@Charlie MacPherson thanks for your input.  I didn't realize that such a small increase in rates would affect your buying power that much.  It is something that I will keep in mind as I look and compare rates at different banks.

@Willie Mandrell I haven't heard about the Mass Housing first time home buyer options...I only knew about FHA. Great to hear that there's ways to avoid PMI, I am speaking with a lender tomorrow and will ask what their thoughts on this program are.

@Account Closed I haven't given a whole lot of thought on those areas but I will do some more research on them.  Thanks for sharing!

That's some really good insight.  I am already seeing the prices in Malden starting to rise higher but I didn't know any of that.  I'm pretty new to the area, but I will have to go check out the bike path sometime this week and see what you're talking about.  But it sounds like there's definitely a ton of potential for the area.  As a new investor it's really helpful to hear your insights. Thanks for sharing! 

Right now, I would be able to afford a property that is around 325K or less.  I've been looking at a lot of 2br apartments and condos in areas like Malden, Medford, and Swampscott.  I need to be accessable to downtown Boston, but also to the north shore as my girlfriend works frequently in those areas.  I would be willing to house hack while renting out the rooms in my own apartment to friends.  But my main question is whether I should wait to save more so that I can afford something with more rooms.  Buying a duplex in these areas would be at least 600-700K.  Should I keep spending 900 a month on rent or just get started on something smaller that won't save me much money but at least I'd be paying down a mortgage instead of rent?  I appreciate any advice!