All Forum Posts by: Phil Bottfeld

Hi David, what are you looking for in particular? I'm both a CPA and a licensed real estate agent. Are you looking for tax planning strategies?

- Phil

 I'm coming to Laura's event tonight. Should be a good way to network and learn new ideas.

Welcome Ryan, I'm fellow condo investor here in south florida. If you are interested in learning more about the condo rentals, feel free to PM me.

Regards,

Phil

 Craig, I think so long as you got your numbers right.. you should be ok. I have a question on the messy apartment.... is your $5K Rehab figure correct? I'm curious to know what you think needs to be replaced. Paint is not expensive nor is the cleaning, but flooring... that can vary.

Hi Craig,

Just a few things on the numbers….are you sure about the $3,200 in RET? Every municipality is different, check your local property appraisers websites, they generally have a calculator to tell you what your taxes would be. My tax bill generally comes out to 2-2.25% of my purchase price and yours is around 3.0-3.1%.

I agree with the other replies… you need to factor in R&M. Consider that number to be 8% of your annual rental income (approximately $1,500 *12 = $18,000. $18,000*8%=$1,440). This is a pretty conservative number but based on your purchase price and the quality of tenants you have, it does not seem like a brand new place and may have a lot of "keep up" costs unless you completely renovate. Your vacancy will be a large determining factor in your success and you have basically baked in a month of vacancy. I hope the your units are desirable and priced competitively that you only have that much or less.

So here how your numbers shape out

Gross Potential Annual Rent $18,000 (Approx)

Vacancy ($1,500)

Net Rent $16,500

Expenses

Taxes ($3,200)

Propane ($1,500)

Trash and Snow ($1,440)

Insurance ($750)

Water and Sewer ($700) (seems low)

Principal and Interest ($4,680)

Repairs and Maintenance ($1,440) But this varies and I agree with the guys above… make sure you figure out this number (it could be a lot higher)

Cash Return $2,790

Investment 20% of $104,900 - $21,000 (approximately) + Closing Costs (estimating $5K) =Total Investment $26,000

Cash on Cash Return 10.73%

Cash plus unappreciated equity yield = $2,790+ Principal pay down (approximately $850, assuming 30 year fixed rate on your mortgage)   Total Yield $3,640  (14%)

Assume 1% appreciation on sales price $104,900 *1% = $1,050

Total Yield $4,690 - 18.04%

These numbers can change quite a bit and truly are subject to how well you know this triplex, I highly recommend getting and expert to walk the place and give you an idea of costs that you can expect to incur on the R&M side of things. Also, make sure to talk to an educated realtor about your rental prices and what your expected vacancy should be for the triplex. It all depends. One thing no one plans for is a bad tenant…. bad tenant could make this ok deal…disastrous, make sure to use a good screening process. 

Hope this was helpful… the profit (or loss) is in the numbers…make sure you think of all costs and speak to locals who know the market.

Kind Regards,

Phil

 Thanks Mike. I can't take credit, it was my contractor's idea.

Thanks Luc!

Hi guys, hope this draws some inspiration. We are not done yet but attached are some before and after pics of the work we are doing on our current deal. We are about to finish the paint and patch work along with adding the new appliances but I think the granite and cabinets came out great.

 Welcome Alex, lots of knowledge to be learned here. Feel free to ask questions as they come to you!

Hello BP,

My contractor who's been with me for two years is getting flakey. I need a kitchen guy to come in a tear down the old kitchen and put in a new one (he needs to also have materials or access to the materials as well) I don't want to go running everywhere. The kitchen is small 8x8. I'm in Broward County Florida so a local will be necessary. All pointers are welcomed. Thank you.