All Forum Posts by: David Duong

Thank you everyone for replying. It really helped!

Hi -

Besides QuickBooks, is there a super really easy software package that will help you keep track of your expenses on repairs or improvements as they incur so that when it comes to tax time, you can easily import it to TurboTax?

Google it and saw Quicken Rental Property Manager Review software and others that I have never heard of. Any good recommendations? So far, I have kept everything on an Excel spreadsheet, but find it really doesn't work for me. Or maybe I'm just not using the right spreadsheet:(

Thanks for any insight.

Thank you everyone - it was very informative. It's amazing what you can learn in this website over a few days vs. reading a book. Love the ideas bouncing around.

Thank you for your insight.

Thanks Bryan. Do plan on getting the fire insurance.

Also, I apologize I meant to say make the tenant pay for renter's insurance (don't know if renter's insurance will pay for someone injured on the property, but will talk to an insurance agent).

Also, plan on getting an umbrella policy and eventually through an LLC.

Talked to 3 investors in the Dallas area and they each have 2 + properties. They said they never really thought about it.

Hi -

Getting my first SFH property in my name. Since it's my first property, I haven't set up a business structure. How do you limit liability as a landord for your tenant's neglience?

Heard some folks say get renter's insurance and other's say get an insurance umbrella coverage. A few investors I talked just haven't plain thought about it. Just worried someone might sue me as the landlord owing to my tenant's neglience.

Hi everyone,

Posted this on the landlord forum because I didn't realize that there was an insurance forum.

I'm a little confused. To protect myself from liability, my insurance agent suggested two things: either requiring my tenants to obtain Renter's Insurance or that I obtain an umbrella coverage. She said, for example, if someone was seriously injured on the property because the tenant left a rake or skateboard and the person incurred serious medical fees, he/she can go after me. But if I have renter's insurance then that should protect or partially protect me.

Also, read a landlord book who also endorse renter's insurance, but the book wasn't clear why it was recommended.

The other option is to obtain an umbrella coverage, such as a million dollars.

I would like to protect my hard earn assests in event someone is injured on my property as a result of my tenant's neglience. The property is in my name as I have yet to form a company.

Thanks.

Any insight is appreciated. Thanks.

J Scott,

Thank you for the article. It was very informative!

Bryan and J Scott,

Thank you again. Your comments are extremely insightful and it helps tremendously in trying to understand all the cogs.

J Scott, I used your wonderful SFH Rental Analysis spreadsheet given everyone's comments, especially yours and Bryan, I'm not sure now about the property. It's a wonderful learning experience though.

Will you both please let me know what you think after reviewing these numbers (I ran the numbers and it exceeded the 50% rule; I know the rule is just a screening shot and not design to be a 10 commandment :D

I just want to know is my cash flow analysis correct? Also, is this deal worth pursuing since it's only generating $56 net cash flow.

Monthly Breakdown of income and expenses forecast
Rental Income: $1,100
Vacancy at 8.2%: (92)
Gross Income: $1,008

Property Taxes: $283.34 (Bryan if I get the property will definitely protest and yes, please do introduce me. I'm hoping to be a landlord for a very long time)

Hazzard Insurance: $59
Maintenance & Repair: $75
Utilities: $25
Administrative: $8
Advertising: 12
Property Managment: $73
Cap Ex/Reserve: $62.50

Total Expenses: $598 (expenses are 60% of gross income)
Mortgage P&I: $354

Expenses + Mortgage = $952

Gross Income: 1008 - 952 = $56 net monthly cash flow.

Analysis correct and worth pursuing. Thank you in advance and to any others who might help, David.

Hi everyone,

Thank you very much for helping me with my answers. It was indeed informative:

Hi Charles: The comparables are $110K, $115K, and $112. I see on the management expenses just to factor in this to ensure I overestimate than underestimate. Thank you for advising on having some kind of reserve for major expenses. I didn’t think about that.

With your analysis using the 50% rule net cash flow of $184. Still a good deal :D ?

Hi Mitch: Unfortunately, in Texas the property taxes are pretty high. The tax value for the house in 2008 and 2009 were $120K and $124K and for the last 5 years, the annual property tax were above $3,000 (it’s Texas – I guess it’s because we have no state income tax).

It’s an investment property and given my high fico scores above 750, I was able to get the 30 year loan for 5.1% I am, however, paying a 1% origination fee and a 1.25% discount rate. Can I also ask you or someone what does NOOs rate mean or stand for?

Hi Bryan: Thanks for the tax offer. I will take you up on the offer about the company working on the contingency. Initially, I thought the tax value should be around $2,800, but $3,400 is pretty high.

Hi J Scott: Smiling and understand about not relying on tax value. Raw and rookie mistake thinking thatïŠ Thanks on the rental rate assumption and for emphasizing to always err on the conservative side, especially when starting out.

In looking at the property, there were no cracks or anything of significant, and it looks like the owner maintained the property. Even the real estate agent was impress (she sells property to only investors).

Regarding the $3,400 annual taxes, that was the county 2009 assess value.

On the $5,000 closing cost, it was $2,800 for lender closing fees; $1,355 for closing agent, and $1,500 in estimated prepaids/reserves.

Again, thank you to everyone to responded. Given my answers, can you please continue to give me any further guidance? Based on the numbers and answers, this should be a good deal for my very first property, right?