All Forum Posts by: Nic S.

super helpful. thanks @Basit Siddiqi

Hi BP, 

Can someone talk to me about the amount of value you place in Tax Depreciation when evaluating deals. I'm looking at a SFH that cash flows $175 with a lower CoC of 8%. The seller is telling me that I should consider the Tax Depreciation value, not just cash flow and CoC return.

This is a new concept to me - in all my readings and pod cast listening I've always heard that Cash Flow and CoC are two solid metrics for success.

I read this awesome article: https://www.investopedia.com/articles/investing/060815/how-rental-property-depreciation-works.asp that gave me a basic understanding of how TD works. 

I'd love your thoughts on how much you factor in TD. into your analysis. And if my CoC returns aren't met, would you still do a deal?

Thank you! 

Looks pretty solid to me. Personally I shoot for $200/door for SFH or $100/door for MFH with a CoC of at least 10%.

Hey Ben, I'm new as well so take what I say with a grain of salt. 

1) lowest interest rate I've seen for invest properties is 5.5% - you have 5% 

2) If you're dropping $10K for repairs, I would say you can drop your maintenance down to 5% 

3) Ive seen monthly insurance costs between $50-$75 

All-in-all looks like even your conservative numbers are solid with 11% CoC.

This is a turnkey property. Reason why there is no allotment for CapEx is because major items like roof, hvac, have >5 years life (or more). What am I not thinking of? Thanks in advance. Property is in a suburb of KC, MO

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@Mike D'Arrigo thanks for the tips. Asking about when the last tenant turn over was and what was done to make it rent ready again makes a ton of sense and probably often looked over. 12%+ CoC would be amazing, I haven't seen anything YET yielding that return but maybe I'm not looking in the right places..

Thanks, @James Wise I like the 3rd party property inspector tip. Cheers!

I've honed in on the Kansas City, MO area (Blue Springs, Independence, Raytown) to purchase my first rental property (SFR/Duplex). Occupancy rates have been strong for years and I've been plugged in to a solid network of people (agent and local lender).

If anyone in BP land has advice or tips for me, that would be wonderful. I'll try to repay the favor and pay-it-forward. 

I'm pre-approved and actively seeking for a property where the numbers make sense. I'm trying to be realistic and aiming for 9% CoC.

Thanks! 

Looking for SFR/Duplex in the Kansas City, MO area (Blue Springs, Independence, Raytown) Let me know what you got!