All Forum Posts by: Naveen Kumar

Thats a sweet combination IMHO. If I was buying a 100k property for 70k, I would cash out refi after 6-mo and pull out the 14k I initially put in, and then even a $1 cashflow is a good ROI.

Congratulations on your acceptance. 

Are you staying in the dorm for the first year? Do students typically stay off campus? Those answers will help drive any strategies around REI in that area.

@Jeff B. - I have seen Capex and Repairs as 2 different expense items in calc worksheets - around 5% allocated to each. Is that overkill?

@Alan Grobmeier - thats the perspective I was not able to see - PM, vacancy and CapEx do make up for a decent chunk of the expenses.

What home warranty companies take care of repairs and stuff at a nominal cost?

Do you charge the tenant a deductible on those service calls? 

Would you handle evictions on your own, or use an attorney to handle that at some cost to you? 

@Andrew Taylor - the condo fees covers water and amenities as swimming pool and tennis courts. Repairs and Insurance are the owner's responsibility.

Thats what I thought @Jeremy S. - when I tell them of the BRRRR strategy, and that I have to buy at 30% below appraised value, they almost laugh in my face.

I have been crunching numbers on a lot of properties and so-called-deals and not sure if I am missing something, or just not seeing it.

Purchase Price - 100,000

Loan Amount - 80,000 (@5%, 30-yr fixed conventional)

Rents for - 1250 per month

Here are the monthly expenses as I see it:

Mortgage - 430

Insurance - 33

Taxes - 110

Condo Fee - 250

PM - 125 (10%)

CapEx - 62.50 (5%)

Vacancy - 100 (8%)

Repairs - 62.50 (5%)

------------------------------

Total Expenses - 1173 per month

Cashflow - $77 (approx)

CoC returns - 4.6%

People I talk to - realtors, sellers, lenders - they call these a great cashflow property, and I don't see how.

Am I off somewhere? Would you do this deal?  

Appreciate your input.

The only reason to keep it around would be the appreciation factor, which is speculative and I would rather cash out and go for a surer thing. 

 Sent you a request - thanks.

You don't have to buy using all cash - you can start off with a loan and put 20-40% down and use the rest to buy another property using the same strategy.

Do factor the cost of borrowing when you crunch your numbers to see if it makes sense.

Numbers don't lie.