All Forum Posts by: Niti Jamdar

Hi guys - I am looking for a CPA to help me save on taxes each year since we now have multiple rentals and it is becoming important to get the right advice. Is there someone you guys would recommend in and around center city? I guess it's also OK if they're remote. Our HRBlock guy is good but extremely conservative and does not save us enough in my opinion plus he charges us an arm and a leg as well. I also would like to get advice from time to time from this person so someone well-versed in the real estate taxes area would be great.

Any help would be appreciated. Thanks!

Sorry the the delayed response @Jason V.  That's a very interesting idea...I'll certainly look into the RE opportunities in rural Pennsylvania.  And thanks so much for your kind offer of sharing your contacts in the NY area!!  The same goes for you as well...if you're ever looking for properties in the Philly area, let me know...I have a good team set up of realtor, contractor and property manager.

Good luck with your deal!

Hi Eduardo. Here's how I would approach it. First look at comps in the area and see what similar homes are selling for, and determine whether the house is priced appropriately. I would put an initial offer that's around 5% lower than the list price so that there is room for negotiation. As for closing costs, don't ask for it in the initial offer. You can always ask for it after the home inspection...at that point the seller would be more willing to negotiate. Be willing to walk away from the deal if you think you'd be paying more than the house is worth. As for your realtor, he should be worried about your feelings and not the seller's. If you think he's not going to help you get the best deal, there are other realtors out there that would. Good luck with the deal!!

Thanks all!  @Melissa N., our cash on cash return is around 20%. Here's the break down - we bought our most recent property with 36k cash down (20% down payment + closing costs). Since it was rent-ready, we didn't have to spend anything up-front to fix it. After PITI we make a profit of $7,200 a year, which gets us to the 20% CCR. I totally agree about reserves...we have set aside some funds to cover vacancies/maintenance expenses.

@Jason V., the podcast I was referring to is #155 with Sharad Mehta.  You mentioned looking into rural areas...Do you mean buying homes out in the country?  Could you share a couple of areas that you've looked at?  I was curious to see how those numbers might work.

Thanks!

Niti

Hi all, thanks so much for taking the time to respond!  20% cap rate did sound too good to be true.  I would love to get your perspective on my current model.  

Here's a quick background. My wife and I have full time jobs. With a 16 month old and another baby on the way, we were looking to create a passive revenue stream, and decided to take the plunge into REI last year. So far we have purchased 3 single family rentals in Philadelphia (point breeze neighborhood)...between 100k and 160k each. We got a really good home inspector to go through them with a fine-tooth comb, and they're all in relatively good condition (no major expenses anticipated in the next 3 years). We were luckily able to rent them out to good tenants (i.e. they pay their rent on time, and they take good care of the house). After excluding PITI (we have traditional 30 year mortgages with 20% down on all properties), we make a profit of around $600 a month per property...although this is without accounting for operating expenses or vacancies.

But here's the rub, I was listening to a bigger pockets podcast recently where they had a guest investor who invests in C properties, and he said for every $40-$50k he invests, he usually expects $1,000 in profit per month.  That's almost twice the profit we make!  We're looking to invest in more properties, and now I'm wondering if I'm not making good enough deals.  Does our current model make sense, or have I made 3 so-so deals? Are there more profitable options (without too much additional risk)?  Should we be looking at multi-family?  Should we look at out of state properties?  Although per  Ben Leybovich and @Jason V's suggestion, I would like to stay away from cheap properties.

Thanks so much!!

Thanks guys! I will do this. 

Any other tips for a new investor to this market would be greatly appreciated. What are good areas for rentability so properties aren't vacant for too long?

Hi Everyone,

Posting my first question here. I'm looking to invest in a multi-unit rental property. I was comparing various locations and found Rochester, NY strangely appealing on loopnet. It had a very high cap % (20%) for multiple properties. However, some of them were being offered with an added offer to manage them. Am I falling into a scam waiting to happen or is the rental market in Rochester, NY really that attractive?

Thanks in advance for your input!