All Forum Posts by: Nathan Scott

I can't find anything that addresses my issue specifically. I've seen tons and tons of videos of calculating your ROI, but when you guys plug in numbers on rental properties to see if it's going to workout. And let's say there is no rehab needed. For the "Additonal Cash invested" portion do you add in the title company fees, loan origination fees, and the 6 month worth of reserves needed? I only see people adding the amount needed for rehab work and no one has specifically mentioned that they add this in there to get there ROI

@Jim K. Thank you for your advice! I believe I’m going to back out of this deal and just take a loss on my earnest deposit.

@Sean Lambert Also, from what I can see on google maps. The area where the house is doesn’t APPEAR to be in a rough of an area as described. It starts about 2 streets over. That’s where you can tell it’s D class for sure.

@Caleb Brown I’m considering passing. That’s what I’m leaning towards more and more.

@Sean Lambert this property was bank owned. No records of anything at all really. I live 2,000 miles away but I have family who lives an hour away. They will be walking the property for me.

I have a house under contract that I knew was in a rougher area. However, after speaking with 2 home inspectors they both informed me that this area is “ground zero for gang activity.” The purchase price is $33,800. Rents for $500/month. Cashflow should be around $125/month. Current tenant has payed on time every month for almost a year now. I’m going to speak with the property manager tomorrow and ask if she has other properties in that area and how paying rent usually goes, how long it usually takes to get the property rented again, etc. I spoke with my mentor and he said “Well, cashflow is the main focus right?” And I agreed. He then said, “If the property is cash flowing and the tenant is paying on time then I wouldn’t be too concerned about the area. Everyone needs a place to live. If the tenant is paying on time every month then that’s great. I wouldn’t be to concerned with it.” I know the unemployment rate in this particular city is close to 5%. Vacancy rate from what I’ve seen is close to 10%. Thoughts/guidance/etc? Questions I should ask?

@John Casmon will do! I am looking at updating as tenants move out. All units are currently rented at less than the average rent for that area. They are 2bd/1bth apartments rented at $495/month. The average rent (according to rentometer.com) is $525-$550 for 2bd/1bth in that area.

@Jaysen Medhurst I’ll have to look more into the cap rate in this area. From what I’m seeing in this area right now there are only 2 vacant units in a 4 mile radius.

@Erik Whiting I'm estimating taxes around $190/month, insurance around $70/month, putting $100/month aside for repairs, $200/month for CapEx, estimating $100/month for lawn care. I was told tenants pay all utilities.

FYI...This is my FIRST investment property. I’m super excited about it! I just don’t want “analysis paralysis.”