All Forum Posts by: Min Wang

Thank you all for your feedback.  It looks like since I posted this, someone made and offer and it is now under contract.

@Vijaianand Thirunageswaram Is it risky to not include cap ex? I feel like that's how you may find yourself under one day if something bad happens. I'll have to learn more about DSCR.

@Mark S. I'm being extra conservative being new.  And it's now under contract!

@Clayton Mobley I read that 8-10% is typical for property management but I also heard sometimes property managers sneak in fees.  I was being extra conservative.  The bigger pocket calculator gave me the ranges for repairs and cap ex.  I chose the higher end of the range but not the highest (15%).

@Ryan Goff and @Cody L. Your suggestions were very helpful.  It was actually what made me not consider this property anymore.  High crime rates with no one willing to go manage it means I have to put myself at risk to collect rent.  Not my cup of tea but it looks like someone is interested.  I hope they post on Bigger Pockets because I wonder what deal they got and how it goes. 

Hello everyone, 

I recently became more serious about real estate investing.  I'm see myself as a buy-and-hold investor as I want passive income.  I'm learning to crunch the numbers.  

Can anyone with more experience tell me why this isn't a good deal (I'm assuming it's not a good deal given how hot the Houston market seems to be and how long it has been on the market)?:

https://www.har.com/12627-ashford-meadow-drive-a-d...

In summary it's a quadplex asking for $259,000 and is 100% leased with Gross Income of $3400/month. Expenses include maintenance at $200/unit or $800 total (Courtesy Patrol, Exterior Building, Grounds, Insurance, Water and Sewer) and water averages around $125/month total.  Taxes last year was $3091or $258/month (I assume this will go up after purchasing). 

At first glance, this passes the 1% rule, which I think is good for Houston?  I have not seen anything that comes close to the 2% rule when comparing recent sales of different areas to lease prices of similar properties in the same areas.  How does a buy-and-hold investor make money in Houston?  

I plugged in the numbers into the Buy-and-Hold calculator.  I used the following values:

Loan: 20% down, 30 years at 4.75%

Vacancy: 10%

Repairs: 12.5%

Cap ex: 12.5%

Management: 12%

There is hardly any cash flow AND I used last year's tax appraisal value.  Is Houston this tight?  

Thanks a bunch in advance.