All Forum Posts by: Peter Bui

Hey everyone, For some newbie questions for you and if you can help I would greatly appreciate it! So let’s say I find a good deal on an apartment complex and I don’t have the down payment. I seek an investors help who I know who does the down payment. Would I need a letter of intent? Letter of intent is different than escrow contract ? And what’s stopping the investor to just find the address and pursue the deal anyways without me? Any books you guys recommend on reading on dealing with deals like this? Maybe syndication related books. Thanks in advanced! Peter

@Steve Vaughan, thanks for the detailed description. That actually helps a lot! I appreciate you taking the time to draft a detailed response. I'll look into how to calculate IRR!

Hey everyone, I was working on my spreadsheet and I was looking at ROI, and I wanted to understand it fully. So I understand that ROI is your profit (income-mortgage-expenses) divides by total initial investment (maybe down payment+closing costs). So let’s say I’m renting it out and building equity, how how does equity come into play. Once the house is paid off does that mean I get a 108% ROI (if my original ROI is 8%?) Thanks in advance! Peter

Victor Steffen I was looking on Craigslist and people were renting out 1500 for a 1 bedroom so I just used 2400 for the purposes posting this. But I can come up with better comps next time. I like your thinking for maintenance and capex. I also like your thinking for setting aside one months worth for vacancy. I’m going to adopt and steal these calculations! Thanks for the feedback! Happy investing!

Looking at this property in Long Beach and here is my analysis.

*Just for deal analysis practice, looking for some feedback to see if i should increase some expenses or add some missing expenses that I didn't account for. 

240 E Louise St Long Beach 90805

Lets say I purchase for 365000

Maybe rent it out for 2400 (too low, too high?)

Expenses 

Property Management Fees - NA
Repairs and Maintenance	50.00
Real Estate Taxes	400.00
Rental Property Insurance	100.00
Vacancy	100.00
Capex	100.00
Monthly Operating Expenses	750.00

Loan

Down Payment	73,000.00
Loan Amount	292,000.00
Acquisition Costs and Loan Fees	10,950.00
Length of Mortgage (years)	30
Annual Interest Rate	5.000%
Initial Investment	83,950.00
Monthly Mortgage Payment (PI)	1,567.52

Cash Flow: 2400 -  1566 - 750 = $82

ROI: 1.18%

According to this analysis, this isn't a good property to invest in. Any feedback would be appreciated! 

Thanks in advance!

Peter Bui 

Hey @Rob Moran that sounds reasonable and safe. I will adopt your method. Thanks for the advice! 

Hi @Rob Moran Hmm, seems like that is where I would need help with. What is a normal interest rate for investment properties in Southern California? OR what would be a safe number to put down on my analysis? 4.87%?

Thanks! 

@Rob Moran Sorry that was a typo. Mortgage is actually around 1583 but cash flow still ends up being around 200. Hmm but if i were to add additional capex and repair rates then that would still change that. Thanks for the advice!!

Hey BP Community, 

Looking for a Real estate agent (who's also an investor) to give me some feedback on deals and search criteria. Or just advice before pursuing the deal . Anyone know of any in Orange county / Riverside / Long Beach ? 

Thanks in advance! 

Peter 

Looking at this property in Riverside and here is my analysis. 

8377 Cypress Av Riverside 92503

Lets say I purchase 400,000 

The actual rent on it right now is: 550 + 1100 + 750 = 2400

Expenses (monthly)

Repairs: 50

Taxes 366

Insurance: 100

CapEX: 100

Total Expenses: 616

Loan

20% down, 320000 loan

30years @ 4.3% 

Mortgage: 1139

Cashflow: 2400 - 1139 - 616 = 200 monthly Cashflow 

ROI: 2.61%

Just looking for some feedback on this calculation, it looks like it isn't that great of a deal since ROI is only 2.6% but it does cashflow, so it can't be too bad.

Thoughts? Would that be an acceptable ROI being in the Southern California with the market as it is.

Would you invest in this property if you could get a purchase price? 

(If you are going to pursue it, take me with you! Just want to learn the process)

Thanks in advance everyone!