All Forum Posts by: Michael Krassos

Scott, Like you I am eager to get into REI but have resisted so far because I cannot make the math work. I've looked at my local NJ market and a number of Turn-Key providers out of state in the so called hot markets; Memphis, Atlanta, etc. I have spent months reading, listening, filtering through the vast amount of information available. I agree you could determine the right buy price and make an offer but be prepared to walk if they don't accept. Unless you are willing to take on huge risk, I suggest you abide by the Rules of Thumb. I recently discovered (through BP) that the deals do still exist in certain markets and the 2% rule exists. Think seriously about getting into your local market just for convenience. It won't be too convenient when you're broke!

JR, Newbie here so please ignore my ignorance, I don't understand why you would rent your beautiful home with high-end finishes to Section 8. We're you in a desperate position, inexperienced. Excuse me as I'm not trying to rub salt, rather understand so I don't repeat your mistakes.

I'll be there!

Hello all, Background Up to this point I've been looking for Single Family Rental opportunities from Turn-Key providers out of my home state of NJ. These opportunities required no immediate repair and are marketed as rent ready. Essentially these providers buy distressed, fix up and sell as cash flowing opportunities. I evaluated the worthiness of an opportunity in the following way (simplified for Blog purposes): -- Cap Rate > 7.75% -- First Year Cash on Cash Return > 12% (Expenses include closing costs, funding costs at 20% down, inspection, appraisal, legal costs, property management, maintenance, etc) -- DCR > 1.6 -- Positive Cash Flow -- All with expenses estimated at 50% What's Next? Now I'm exploring partnering with someone out of state and buying a property needing some repair, then renting. The Question Do I keep the costs to repair the property to get it rent ready out of the equation? I'm familiar with the 70% rule but not sure where or if to insert the repair costs into my calculations. If I keep it seperate it seems the money spent to repair will only be returned at point of sale (hopefully at ARV or with appreciation for a profit). Appreciate the help.

Correction: last sentence of previous post meant "20%" not 10%.

How do you all calculate Cash on Cash, especially to Scott W on suggested 20%. Do you include closing costs; inspection, attorney fees, bank fees, recording fees etc? Or are you basing 10% strictly on equity down only?

Thanks Paul, couple of follow-up questions;

1. What is DCR?
2. Do expense ratios you provided apply to single family homes?

Hi all, so I realize there is no standard, markets vary, and risk tolerances vary, but am interested in all your opinions.

New to this and chosen a strategy of Buy and Hold, am looking at properties outside of my home state of NJ for reasons I think you know.

I am risk averse and not looking to lose my hard earned savings anytime soon. I therefore assume expenses will be 50% of income for older properties and 45% on the newer ones - based on what I've read on these forums this is where it ends up over extended periods and my strategy is to hold for a long time. These expenses include Property Management, maintenance reserves at 10%, vacancies at 1 month rent.

Question: what would you suggest for a minimum Cash on Cash, and Cap Rate?

Turn-key providers please refrain from responding as I want to hear from the landlords with no conflicts of interest.

I'm up in Bergen county, let me know if you want to connect

Hello Darren, I'm a new investor also located in Northern NJ and have some doubts about finding good opportunities around here based on prices and high taxes. I've therefore lately been looking at turn key opportunities out of state. Would love to hear more of your successes and talk to you to see how we could partner up.