All Forum Posts by: Masud Khan

Appreciate the input all.

@Bill Brandt- thanks for showing how you managed to do it. Very accurate that I want these notes paid off if by the time I’m 65! Question- did you buy around you or outside the state/far away counties? Also what types of lenders did you have luck with for loans 2-5? Were you putting 20-25% down?

@Russell Brazil no single answer to that question. I assume in some of the fast growing suburbs in northern VA, you have legacy investors (purchased 5-10 years ago) that are now starting to see cash flow. For first time investors looking on these areas, I have to assume investors are dealing with (and can afford) negative cash flow for several years and are playing the long game. @Scott Hibbert- good point on looking at multi unit. In my particular case, that gets out of my price range to put 20-25% down.

@Scott Hibbert Thanks for the info. I'm looking at a variety of places- some newly renovated and others requiring some work (80's, 90's builds mostly). I've been using the DealCheck app to estimate. The DC area is so expensive vs. low rental costs, that for 100% of properties I'm looking at there is a guaranteed negative cashflow if I factor in padding for capex, maintenance and vacancy. For most places it comes out to me paying 5k to 7k annually out of my pocket outside of the rent covering PITI. I'm wondering which parts of the country investors are generating full positive cashflow, including all this cushion??

Great feedback Bill. Appreciate the breakdown. I suppose it all boils down to being able to afford the extra $ for the 15-year so by the time retirement hits, the property is generating real income. If this single property involves additional cash flow from my pocket, how do other investors free up to acquire additional properties? Let's say If I go to the bank for property #2 in 4 years, would they look at my DTI and notice that it is significantly higher on the 15-year for property #1? Thereby shutting down additional loans for a second investment. The goal would be to have a few properties generating income over a 20 year horizon. I'm a late starter in the game at age 46, but love the idea of income properties. Just grounding myself in reality of the numbers.

I was hoping you would say that... @Joe Villeneuve  Some of these books (one I purchased from Bigger Pockets) pads all these additional expenses into monthly cashflow, which means ALOT of deals are thrown out.

New rental investor and soon to be landlord here. I’m doing the math on evaluating properties and having a hard time getting realistic monthly expense estimates for a 2 bed/ 2 bath condo and/or townhome.  

So far here’s what I can estimate with accuracy:

-monthly principal and interest payment
-annual taxes (published in MLS)
-insurance (around $950 annual)
-HOA/condo fees. (Published in MLS)

Here where I need some help:

-what is a good annual maintenance and Capex budget?

-vacancy?

-when evaluating a property, do you factor these expenses into your monthly cashflow? Meaning, should your rent also cover maintenance, upgrades and a vacancy amount?

All help would be hugely appreciated!

Thanks for the input Joe. A separate question on positive cash flow from what I read vs. investors that I speak with. Some say positive cash flow is the rent covering PITI & HOA (if its a condo). In your experience, should the rent cover the PITI, HOA and also a monthly amount for maintenance/capex? If so, that will be nearly impossible in the DC and surrounding suburbs! I'm curious on which parts of the country investors can generate positive monthly cash flow.

I’m in the process of buying my first rental property. My credit union is offering 3.1% on an15 year while another lender is offering 4.87% on an 30 year for investment properties. I’m 46 and aim to retire by 65. With only 20 years on the retirement horizon, do I go with a 15 year or 30 year mortgage?

A couple considerations:

-my goal now is but and hold. in retirement it would make sense to have all the rent come on as cash flow and not have to pay down a mortgage.

-in my area, prices are expensive, so I my rent would not quite cover the Monthiy expense even for a 30 year mortgage. This means even more out of pocket for a 15 year!

Any help would be appreciated!!