All Forum Posts by: Michael Lewis Lee

Hello again!  I was going to suggest that you figure the worst case scenario, not counting on hope.  Best wishes!

Hello Jonathan! A good cash on cash return is about 12% and a good cap rate would be between 6 and 8.  A cash on cash return would be the total amount of cash spent divided by the annual cash return, net after all expenses are paid including the debt payment.  Your cap calculation sounds right.  Good luck to you!

Good thinking Justin!  See if you can access the only bathroom from the hall but that typically is shied away from by the master bedroom people but if it is the only one it may be accepted.  Best wishes!

Hello Justin!  I believe in what Scott said.  That will not be a good situation for most no matter the demand in that area.  Not a good property to own.  Unless you can get a great deal and the worst case scenario will still put money in your pocket after all expenses are paid might still be bad.  You may have to discount it to sell it.  If you are not planning a new bathroom without adding to the slab it might be a bad property.  I would not consider it unless you have a long term renter already waiting.

I am currently looking around Dallas but there is a bunch of competition out there.  I got that 150K limit from a successful speaker on the internet that I believed.  Best wishes!

Hello Stefan!  What about next year?  What will you do?  It might be better to sell that property and go down the road but pay more attention to it's taxation amount.  It can be hard to get around a large tax bill in Texas.  Make sure you consider it when buying.  Do not count on inflation.  The future is fairly unpredictable, so be careful.  I know it's hard but only pay up to about 150K when renting out in Texas and be able to pay the tax bill on a home and still have a positive cash flow and get market rent.  Good luck to you!

Hello Chris!  I do not know much about Toronto but all that I have heard is that Canada in general is too expensive but that does not mean that you might find a property that is sold as a good deal.  Also, know the tax situation/the tax situation of what you are getting into.  In the U.S. you might be in the highest tax bracket and you would owe quite a bit when you sell or if you don't comply with a 1031 exchange or make one happen.  Good luck to you!  Don't give up!

Hello Blake! You kind of sound like you know what you're doing but I have some recommendations. First of all make sure there is demand in that area for your plan and is your use needed? I would try to keep your total cost to 150K or less so you can rent and still profit after the debt payment. All ways have a positive cash flowafter debt payment. If you know what you're doing it will make financing easier. Yes, you want contractor agreements in writing and a limited first draw amount with all work being completed including the punch out work with a signed lien waiver signed before making that final payment. You need an acceptable ARV Appraisal hired by the financier. I would not depend on Zillow. Closing costs should be considered skin in the game. Whenever possible try to get the property owner to finance your deal. Show them on paper how they can make them more money. If they need some cash let that be a second note with different criteria. Be creative. Some financiers will allow interest only on their payments. Your split with a Partner is whatever you agree on. Interest could be paid monthly or accrued and paid when you refinance it. Do whatever makes you happy. There should be trustworthinest between you and the investor before a deal is made. Feel good about him and his responsibility before taking on a Partner and know what he totally expects. Good luck to you!

Hello Joseph!  Be careful when you pick Team members but they are very important for your help.  Do not try to do everything yourself.  Only risk experienced Team members that are experienced in what you are hiring for and charge by the hour and could be considered a professional.  It will be better if they know current law and learned from other than public teachers. Your and their continued education by experienced teachers is critical.  Good luck to you!

Hello Mark!  My advice would be sure to check the demand including local employment and the likelihood of it staying around.  Know how many units you need to pay your bills making a minimum of profit.  Always do an evaluation that figures the worst case scenario.  Keep all units in the same area and within a hour's drive.  The more units under one roof, the better  Avoid a regular Bank.  Try to get owner financing and showing  them how they can make more and get closer to their listed price.  Sometimes, a medium sized and growing city is the best.  Good luck to you!