All Forum Posts by: Marc Ferguson

Hi @Sarah Lindberg, welcome to the wonderful world of real estate investing. How long have you lurked around the forums before finally posting? :) Regarding tenants, have you considered a property manager? It is an expense, but I consider it well worth the money. I don't have to deal with tenants at all. If you go that route I would make sure you interview the PM in order to see how they handled previous evictions. I'm paying roughly 7% of my rental income to my PM. There's a range, of course.

Hi @Kevin Jung, if you want to do some extra homework I'd suggest plugging in some numbers into this spreadsheet - https://www.biggerpockets.com/... . I found it in this article Real Estate Analysis 101: How to Analyze Real Estate Deals (biggerpockets.com). This shows you what the potential of that property could be for the term of your loan. Like @Jennifer Donley suggested make sure you add all your other expenses (vacancy, property management, etc) and see if this place really cash flows like you hope it does. Good luck.

Hi @Weam Banna,

I'm not sure how "accurate" your estimates could be--there's a lot of estimating in the beginning of a deal. Based on the rental calculator expenses are:

• - property taxes
• - insurance
• - repairs & maintenance
• - vacancy
• - capital expenditures
• - management fees
• - electricity
• - gas
• - water & sewer
• - hoa fees
• - garbage

A couple of those are easier to calculate. The rental income you collect you'll want to set 5% of that for repair & maintenance, 3% for vacancy, another 5% for capital expenditures, and 10% for management fees. Anyone of those numbers are adjustable, but it's a decent place to start.

Electricity, gas, water & sewer, and garbage are based on the city your property is located. So; you'll have to look at their websites. You should be able to determine if there are any HOA fees if it's in a community, Zillow, or maybe just ask someone in that neighborhood. Word-on-the-street is real estate investment is more social than running numbers. :)

Is there a specific expense that you are unsure of or was your question more general?

Hey Dimitri, did you ever get the help you're looking for? It'd be interesting to see how things panned out a year later. I'm new to the game as well (Georgia market) and knowing what my expenses should be is a bit of a road block for me. I used the BP calculator (rental) https://www.biggerpockets.com/... and that gave me a good baseline. I didn't want to keep coming back to the site so I created a Google Doc and a Google Form to help speed up the analyzing process.

From what I gathered it looks like knowing the following items will help: 

From there I calculate the total income, total expenses, and the mortgage. Finally coming up with a CASH FLOW. I hope I've been doing it right. That's what I've learned so far.

Hi @Brian Ellison. I took a step back and stopped looking for properties. At the moment I'm reading through @Brandon Turner's book, "The Book on Investing In Real Estate with No (and low) Money Down". I'm on the chapter about wholesaling. I wouldn't mind meeting up. How long have you been in the investing game?

Hi Dan, I'm glad you found this post. I was just about to send it to you. I'll have to do more research on some of the things you talked about (ie. separately metered utilities). I doubled up just in case. I have one PM managing a townhouse for us and they charge 10%. I should double that number since the PM will manage two tenants.

Besides a few minor things in my report is this the kind of calculations you do when assessing a duplex? In regards to this being a good deal or not, with the mortgage being paid and us cash-flowing above $500... is that good? Is the idea that any positive cash flow is good even if it's like $100 or so? I'm trying to figure what makes having this mortgage in my name worth the asset portion of owning this property? Thanks.

Hi, I'm very new to real estate investing. I used BiggerPockets' rental calculator to see what a single family home would look like. Very cool tool. I'm now trying to do it manually so that I have a better understanding of how to run-the-numbers. Can you help verify if I did this correctly and if I'm missing anything. Thank you for any guidance you can provide.

DUPLEX

Purchase price: $210,000
Closing cost (2%): $4,200
Down payment (20%): $42,000
Annual property value growth (appreciation): 2%

Loan
Loan amount: 168,000
Interest rate: 3.042%
Points charged: ?
Loan term: 30 years

Rental income
Gross monthly income: $1,100 x 2

Monthly expenses
Property taxes: $189 ($2,268)
Insurance: $90
Repairs & maintenance: $55
Vacancy: $33
Capital expenditures: $55
Management fees: $55
Electric: $123 x2
Water & sewer: $40 x2
HOA fees: $0
Garbage: ?

Total income: $2,200
Total expenses: $803
Mortgage: $859
CASH FLOW: $538

Wow, Holly. Those are definite "next steps." Thanks for that.

Hi, I'm new to real estate investing and I'm super excited to jump in feet first. I'm a 41-year old software engineer and my name is Marc Ferguson. I'm a father of three (two in high school, one in middle) and married to one of those sensible Canadian women. I read the Rich Dad, Poor Dad book and I'm amped about acquiring assets. My goal in investing is to acquire rental property so that I can quit my job and work on my other passions in life. I'd like to reach that goal soon so that I can enjoy traveling the world.

I found BiggerPockets after searching something real estate related on the Internet. I was impressed with their web site and found their arsenal of podcasts. They are now in my daily rotation of feeds and I've recently become a pro member. So; I'm looking to take full advantage of this platform.

I have one rental property (single-family home) and another townhome that me and my family live in. I did the rental property without knowing anything about real estate investing. It was a townhouse we lived in, then when we moved we kept it because we knew renting it out would be a good financial move for us. It was on the market for a while; finally we were introduced to a property manager and they've done a great job getting tenants and managing the property.

I'd like to build wealth through passive income and I'm now teaching my kids these concepts that I wasn't taught. Hopefully they'll get started in this game earlier than I did.

I'm not sure what my next steps should be. I played around with the rental property calculator so I have a rough idea of Cash flow and CoC ROI. I want to do a dual plex, but I'm unclear what to do next. Thanks for any advice.