All Forum Posts by: John Stark

The building is 8 years old and doesn't need any major repairs... just pressure washing the siding, replace a few broken window screens, and possibly a fresh coat of paint on the interior.

In this area, prices have held steady. Most properties are taking longer to sell, however.

Is the main difference between the way nationwidepi and MikeOH ran the numbers is that MikeOH figured the down payment into the monthly mortgage payment?

And my goals are to be in this for the long term. I would like to take profit from my other business and invest it. I'm not any good at stocks, which is why I am looking at real estate. I'm young enough that I don't care to spend the profit from my main business on material items. I can hunker down and make it grow for me.

How much better would the deal look if I got the property for $189,900? The realtor I spoke to said they are going to drop the asking price.

And the 50% rule is just an estimate as to what the monthly expenses are going to be, right? So if the expenses come in lower, then I can keep that extra that's been set aside?

Seems like there are two methods which all the books, videos and articles put forth: Cash Flow and Appreciation.

Landlording seems to lend itself to the Cash Flow side of things, with possible returns several years down the road when the property has appreciated.

So take this property that I'm looking at as an example:

4-unit apartment selling for $209,900.
Currently fully rented for $580 each unit.

Now, I'm a newbie, and if I'm doing the calculations right, this seems like a good deal with some real cash flow.

But I can't help but get caught up with the part that I need to plunk down $40k plus closing costs just to get into the deal.

So I am tying up my $50k to get about $1,200 per month, or about $15,000 per year. So I don't even get my original $50k back for over 3 years.

Now, the first 3 years I will be building equity in the property that really my tenants will be paying for, as well as some cash flow. After that 3 years, I could either sell it and take the profit or keep it and continue getting cash flow for as long as I own and maintain the property?

Is this the proper way to be evaluating a potential deal?
I'd appreciate any feedback, especially if you are good at more complicated calculations like ROI and the TVM.. things which make my head hurt!

Hey was just wondering if you could elaborate buying property for less than 50% of market value...?
I'm a new investor and was wondering if this is a property that needs to be refurbished to get back up to market value? Isn't market value the amount someone would be willing to buy and another would be willing to sell a property at?

Thanks!

I thank everyone who replied for helping the thread take off! In my absence (BUSY at my 9-5) a lot of great info really came out.

Thank you!

Hello everyone!

This is my second post. Brand new investor here looking to purchase my first property soon.

Ignoring the fix & flip side of things, and just talking about buying homes and renting them out, is the general idea to buy a property, rent it out for positive cash flow (after PITI & expenses) and using that cash flow to help with the down payment on a second property and using the 1st house as collateral for the second loan?

So each previous property is collateral for the next? Just curious how lenders look at that. Obviously, speaking personally, I wouldn't qualify for say, 3 mortgages if I were going to live in them, but if I have 3 homes and rent each of them out with positive cash flow and positive equity, I would most likely qualify for a 4th loan, a 5th loan, etc.? rinse and repeat?

Hello everyone!
Trying to do my first deal in the near future.

I am looking at an old home built in the 1940s which has 2 apartments in the back above the garage. The owner was an elderly woman who died recently. The house needs some TLC.. needs all new floors, ceiling work (patches, lines, etc.) and new paint all over.

1 apartment in back is currently rented at $350, which is a bit low, but the renter used to do yard work for the lady which gave him a discount.

My main concern is how well will a 3 bedroom, 1 full bath home rent? I'd like to rent the 2nd apartment in back AND the home. I think with the market it would be pretty easy to find a renter, but would 1 bathroom be a deal killer? I have thought about adding another bath if needed.

Thank you!