All Forum Posts by: Pete Hornstein

@Jeb Brilliant

Would be interested in talking about this if still available

Ok I get that EIDL is a longer term option and the only thing really forgive able is the 10k you would get even if you are denied.

My question is .... say I just bought a property in January and I have a mortgage for 100k ... i have other properties with mortgages and previously bought but I’m focusing on the recent purchase bc the terms aren’t fixed. It’s a 5yr balloon.

So...

I add up my gross rents for nine months, all mortgage payments, utilities and RE taxes. That equals 100k

What happens if i take the 100k from EIDL and pay off the 100k mortgage I just got bc EIDL terms are much better at 3.75% for 30yrs fixed?!?!?

Can I do this?

@Cameron Tope if you have a property assessed at 100k but you buy it for 250k... are you not seeing the taxes go up ?

@Theresa Harris

I realize that... and yes the property taxes are listed but they will change with the sale of the property correct? If you buy a property that was a 40k junker then renovated into a 120k sale you can’t expect the property taxes to stay assessed at the same number.

My question is what are the pros using on here?

Ok I keep looking at deals and running numbers and I keep wondering if I am estimating high on property taxes. Many deals I see the assessed values are lower, sometimes much lower than the sale price. So I estimate my own property taxes going forward. Example: sale price is 300,000 so I take 300,000/3 and multiple by a slightly higher tax rate. Say the bill says it’s 8.4% I use 8.5%

So 300k / 3 = 100k x .085 = 8500/yr

Instead of the property currently being assessed at 240,000 with the 8.4% tax rate.

Whats everyone else using or doing in this situation ?

@Douglas Curtiss

I’ll throw my two cents in...

Management I always put in 10% bc I may want that option in the future and my time is also valuable so if I’m working more I want more return.

Capex and repairs float for me. I use separate items and usually capex is about half of repairs. Some rough properties I bump up the repairs to 12-15% but usually I'm around 10%

So management 10%, repairs 10% and capex 5%.

Vacancies can slide some but not a whole lot... for me... 6-8% there usually

@Anthony Wick

Right but what do your numbers look like when you do need to have PM. I want that option IF something happens

@Anthony Wick

It’s Bloomington, IL. Sure they are high ... no doubt... but I look at it as worst case scenario. I got one deal under my belt and going towards more. Fine tuning as I go here.

@Adam Mittermeier

Ok yeah I totally see that i guess my rational was keeping these constant so I can compare the ROI on different properties with less variables. But i totally get what you guys are saying.

when analyzing deals I am using 10, 5, 10 and 12 percent for repairs, cap ex, property management and vacancy rate respectively. These are conservatively high in my area just so I know we can “hit the mark”.

Question: do you guys keep those percentages constant between properties in same market? Or do you analyze the potential and adjust for each property? So a real nice well kept 3 unit 1 bed 1 bath may have different rates than the 4 unit 2 bed 1 bath in different part of the city.

Just curious.