All Forum Posts by: Nathan Patterson

So from what I understand you want to invest the money of your "rainy day" fund while it sits.  Such as the money from cap. expense, maintenance, etc.  

I would think using a savings account or using a variety of cd's and rotating them over.  So take the money and split it up, have some in a 3 month CD, a bigger portion in a 6 month and a little more in a 12 month CD.  That way you're always invested in some interest baring account, granted not much but it's something.  You could even split it up between a savings account and the CD's.  This way you would even have some immidiately available to you in the savings account as your getting the money from the CD's out

I would think investing them in stocks would be too high of risk for such a potential short term and also the potential loss of money.  

Hello there, and Welcome to the Encyclopedia of Real Estate.  Or it seems that way more and more.  Looking forward to your updates.  

What about capital expenses?  Are you doing landscaping or someone else?  How do all the major items look(roof, hvac, etc.) How's the crime rate since it is in a C class area.

The after photos look amazing.  What were your holding costs?  I'm wondering why you put a washer and dryer in with the property.  Is this common in Massachusetts, or were you trying to help it sell? 

@Benjamin Blackburn  Think of it like this.  If you were running a restaurant, after paying expenses (inventory, wages, utilties etc.) you wouldn't take all that is left over and put into your pocket(well I wouldn't but some might).  You would pay yourself a salary and then the rest you would put toward emergencies, growing the business, etc.  

As for real estate though, I would pay myself that 10% I would give to the property manager.  Since I would be the property manager.  The rest I would put back to grow my business.  Unless until I actually have a property manager then I would start to accept what is left over after everything.  That is just my viewpoint on it though.  

From my research and readings it seems that 7-10% is the standard for Prop. Management, vacancy, maintenance and repairs.  I adjust cap expense depending on the properties age, sq feet, when it was done last etc.  Example, I don't need to put as much back for a roof if a new one was just put on 3 years ago, compared to one that needs one in a year or two. 

You should calculate for a PM like @Barbara G. said.  For two reasons, one you might need one later and because you need to pay yourself something. 

While many make the point of  you are getting the money each month so why rock the boat.  Which I agree with because I wouldn't want to deal with an angered tenant.  I do think that if you don't want to deal with this again, put in the lease that if they elect to have it electronically transferred to you.  Then the money must be in your account by the 3rd day to avoid a late fee.  

Him starting the payment on the last day is negligence on his part.  The tenant should know by now that it takes a few days.  What else will they neglect if you don't enforce this or will they try to get by on. 

@John Thedfordundefined

Interesting viewpoint on financing.  Why did you choose this method compared the standard cash flow every month for 15-30 years. 

I'm not an experienced investor but I'd like to ask how are the big items looking?  Is the room good for 10 years, or will it need to be replaced soon.  Hows the HVAC and other big ticket items for the next 5-10 years.