All Forum Posts by: Michael Hill

Hey Michael,

I use 70% there to estimate how much a bank will loan on that rental properties rental earnings. If you have $10,000 in monthly rental gross income established and rolling and you're in a 5 unit property or more (this qualifies the property for commercial loan consideration).  Which I believe is ideal. Normally banks will look at giving you a loan at 70% of the gross rent so here it is $7,000. Then I go look at how much money a $7,000 monthly mortgage payment will get me in cash. With the bigger pockets tools it shows more than $800,000 (20years 5%..). The remaining $3,000 in rental income is for improvements, management, savings, bills...is what the bank is thinking. 

My niece just passed on a deal for a new Airbnb deal.  Went thru a guru program.  Last second found out the Property tax estimate they used was wrong.  They used the gurus tax rate who is in the neighborhood.  Found out the new rate was 2.5 higher.  If she had bought it she would have been one of those people who paid to much.  Trying to get her into Self Storage so I can be the paid Guru and get a free lunch from her. 

3. 70% of $11,200 is $7,840. Now you have the monthly payment on the mortgage for your cash out refinance. 

You need to be researching civil not criminal codes. Specifically look in areas to do with harassment and stalking. 

I’m following this because I have outgrown RentRedi. It was great at first but not so much now. I’ve had renters pay rent and then take it right back out. It takes several days to catch this. Then they turn around and do it again. On my side it shows paid in full until it’s time to make the deposit. Then when it shows behind they turn around and do the same thing. It’s frustrating to say the least. 

I will be using Rent Manager soon after I take the classes. I can’t say if they are the ones to use yet or not though. 

Generally speaking given the RE market were all in right now completing a BRRRR deal is challenging. On the buy side it's hard to command a lower price unless you're buying stuff that's really torn up (bigger rehab). Mix in higher labor costs (contractors are expensive) and higher rates and investors end up with money trapped in the deal. Lenders typically allow 75% LTV cash-out refinance. We have trapped $$$ in all our properties and I'm happy about it.

In our market most SFH BRRRR-type deals won't cash-flow if you pull 75% LTV... so you're trapping more $$$ or getting over leveraged and negatively cash-flowing. Idk about you but we're not interesting in buying rentals that cost us money. Businesses make money (tangible dollars) or they go out.

 If you get all your capital back in 2024 you're dangerously over leveraged. 

You can close in a DSCR loan in your LLC with a similar down payment as conventional.

A property's operating expenses are those that it incurs on a monthly or annual basis and are considered regular and continuing. Expenses like this include things like property taxes, insurance, maintenance, administrative and office costs, payroll, marketing expenses, and property management fees. Examining the T-12 operating statement is necessary for this purpose, since it gives comprehensive details on previous expenditures and aids in estimating future expenditures as the new owner.

Verify that there are no omissions or contradictions in the statement. It is important for multifamily owners to keep in mind that renters cannot be charged more for running expenditures, and property tax is a substantial expenditure to think about. If you want to be sure you don't underestimate costs during underwriting, you should find out if the property's worth will be evaluated after you buy it. This is because several states in the US do this.

We look at ways to increase revenue as well as ways to save costs. You may add income streams to the home by offering internet and tenants insurance, for instance. In fact, we have a bulk package plan on all of our homes that allows us to earn a tidy profit simply by providing internet service. We can increase our income and benefit our renters at the same time by capitalizing on services that are currently in demand.

Hello!  Realtor and Investor here.  I've got a rental that was a new construction in 2022, so no property tax was defined yet (based only on land value. First year was fine on property taxes, and we were cash flowing great.  2nd year the property taxes went up and not enough escrow was taken out by the lender, so now they're trying to catch that up and predict the current year, so mortgage essentially went up $1000 monthly, thus killing my $500/m cashflow and making me a $500/m loss.  

I have 2 other rentals that ideally can subsidize this, so, would I be better off holding onto it for the long haul and evening out eventually, or selling the property and getting something else?  

Rent = $1800/m (Now on month-to-month until they buy a house) - Market rent in the neighborhood is much lower now too, so if I rent again, it would be in the $1700 range.  

Mortgage all in was $1300

Mortgage for Apr 2024-Apr 2025 w/ additional escrow coverage = $2150.  

Appreciate any suggestions!