All Forum Posts by: Monica Evans

Hi BP,

My husband and I purchased our first rental property and have been renovating it. It's a twin that was built in 1928 and has existing hardwood (or it may be softwood one contractor mentioned?) floors that are currently completely covered with old wall to wall carpet that we'll rip up once reno is done. The question is - do we cover with new wall to wall carpet or refinish? It will be a rental so wondering what is the cheapest and best option over the long run. 

- There will be tile in the kitchen and bath, decision is for the dining/living area, stairs/hall and bedrooms.

- Property is in Pennsylvania so there will be snow. 

- Long term goal would be to sell down the line so would hate to have the tenants trash the hardwood. 

Any guidance and advice from veteran landlords would be greatly appreciated!!

Thank you!

My husband and I recently closed on our first investment property which we plan to fix up and then rent out. My question is: if we redeem our personal credit card points for Lowe’s / home dept gift cards to go towards supplies/materials/cabinets etc, can we deduct that as an expense even though we used a gift card vs a credit card or cash? Any accountants out there or anyone who has done this who can share some insight? Thanks very much, Monica

Hi Everyone,

My husband and I close on our first investment property in 2 weeks!! Woohoo!

I have 2 questions related to cash on cash return. I have zero background in finance or accounting (I majored in biology) so I need some guidance on these. We've used the rental calculators to figure out all the numbers, returns etc but I'm wondering about 2 things:

1) We have a business credit card that we just opened that has a 9 month interest free period. The property will be a rental that needs a good amount of work up front to fix it up (will be like a BRRRR) like electrical, plumbing, floors, paint, reno on bathroom and kitchen. So if we are using this business credit card to buy some of the materials for the reno, then we rent it out, then we use the cash flow to start paying the balance down, how will that effect the cash on cash return? Is it no different than when you're investing cash out of your own pocket? Or does cash flow from the business effect cash on cash return differently?

2) Related to the above, I'm wondering in general how using the cash flow from the business to pay for future expenses effects cash on cash return. In the "estimated repairs" field in the rental property calculator, we've currently got 25K there. However if we were to wait and use 5K of cash flow instead to pay for something after 1 year of renting, would that decrease the "estimated repairs" number to $20K in that calculator or would it make no difference whether it's cash from the business or personal cash out of pocket as far as the cash on cash return calculation is concerned? I guess I'm partially thinking of that "estimated repairs" field as "cash out of pocket" and I'm curious if cash out of pocket and cash flow to pay for things effects the cash on cash return differently.

I hope these questions make sense. Let me know if more info on the situation would be helpful. Thank you!!

Monica

Ok, thanks Mark and Russel! I appreciate your insight.

Hi Everyone,

We are under contract on our first investment property and we have the option to save $5K off the closing costs or $5K off the purchase price. Is there a general rule of thumb of which is better or is that completely dependent on the exact numbers/situation?

Hi Everyone,

I have a question about saving for vacancy on a rental property. My husband and I are analyzing numbers and are struggling with this concept. For this example, rent is $1400/month. If we are saving 5% per month for vacancy, that is $70/month. The mortgage payment will be $1000/month so if we were to have 2 months of vacancy, we would need to pay $2000. That is over 28 months worth of the vacancy savings in this case. 

Are we missing something? 

If any landlords out there can weigh in on this and point out anything we're missing or provide clarity, we'd greatly appreciate it!

Monica

I am looking for a wholesaler in Bucks and/or Montgomery county Pennsylvania. If you are one or know one, please have them contact me. Thank you!

Hi Everyone,

Thanks so much for the thoughts and advice!! I really appreciate it! Will be sure to keep all of this in mind. :)

Hello Everyone!

I have a question for experienced flippers: When you're evaluating properties to flip, what are deal breakers that deter you from buying properties?

In other words, what are the major problems that make you walk away from a property and not even consider buying it? (i.e. foundation issues, termite damage, buried oil tank, flood zone, roof, etc).

My husband and I are looking for a property to rehab (either flip or BRRRR) and are looking for guidance on issues that we should steer clear of!

Thanks @Mindy Jensen!! I appreciate your response.