All Forum Posts by: Preston L'Ecuyer

@Ryan Blake Thanks for the compliment! My mom is a realtor in Arlington, so I am utilizing the MLS to search.

@Jay S.

Haven't made a move yet.  Still haven't scheduled a walk of the interior of the property.  The Owner has been travelling and busy.

Everything is bigger in Texas...even the property tax haha.

With these kind of articles coming out, does it make it you want to buy and hold?  Even if cash flow is squeezed to the bare minimum?

@Maurice D.

I may PM you more about how to get started in out of state investing.  DFW is so hot right now...

Also, are you getting 3 quotes from general contractors? (Do-it-all type?)  Assume this is during the due diligence portion, once you are under contract on the property?

 Isn't it worth something that at the end of 30 years you have a "free" house? The other investments can't say that. 

I don't think anyone can be 100% sure of appreciation. 

@Eddie Werner

I think I am leaning on a pass here.  I'm going to go ahead and see it in person, just for the experience.  I think looking at lower price points is a good call here.  There are a few duplexes, but not many.  Even fewer triplexes and quads.  Maybe we can find a partner or two to buy a small apartment complex haha.

@Account Closed

Thanks for the sage advice.  I was hoping that ~20K below market was going to make this deal worth it.  It would be a good deal if my wife and daughter were going to live in the house permanently.  The school district is where we would like for her to be and the neighborhood is pretty decent.

@Andrew Herrig

Thanks for the post Andrew.  If I leave all of the original numbers and add in the Property Management, i get the following:

This looks like the definition of a borderline bad deal.  Certainly not a good deal.

First off, thank you to everyone for your input! I have adjusted my numbers based on a number of your suggestions and now the property shows to cash flow at -$194/mo! Even if I got the house for $140K, I'm still only at 2.37% COC. The interest rate (5.2%), property management (10%), CapEx (10%), Vacancy (8.3%), and Maintenance (7.5%) absolutely kill the deal. In this case the 1% rule ($200K renting for $2K) absolutely fails miserably. I'm a bit perplexed, but I have to hand it to the community here at BP. Y'all overwhelmed me with responses, thank you all for taking the time!

Thanks for taking the time to respond in depth, and for your opinion! I will tweak my numbers and reassess.

This is technically a 1% Rule follower (200K renting for 2k).

@James De Stefano

5.75!!! Yikes, maybe my number is too conservative...  I'll use 5.2 for the moment.  I saw that rates were at the 7 year high this week.

@Wesley Williams

I appreciate your viewpoint, and you are correct.  The numbers need to be good even with 10% management fee plugged in.  The numbers are not looking good lol.

@Krishna Chava

I think this is really good advice. Sadly, the duplexes that hit the MLS are gone instantly (a day or two, with multiple offers), and at full market value or even pretty close to ARV. Looks like I'm going to need to start "driving for dollars" and getting my mail marketing going...

@Roger S.

I live in Arlington, within Kennedale ISD, and my rate is 2.79%.  Even if I take 2.7% of the appraised value (220k) I still come up with $6k in taxes.  I feel like this is a solid conservative number.  As for the insurance, my house is 5 years old, market value of $270k and my insurance is $865.  I'll bump to $1200 to be safe.  I'm guessing insurance goes up the older the home is?  This would actually make some sense... Thanks for the comment!
@Ken Nyczaj

The house is only 37 years old.  You may have been looking at the SF number instead of the year?  I've bumped up my maintenance number.

@Account Closed

What is a "land play"?  I have adjusted my capex up to 10%.  Thanks for the comment!  Don't think I can convince the wife to go for a house hack.  Infant child and we are living in a 5 year old home with many luxuries that we would definitely lose by going for a house hack.

@Brian Ellis

I haven't actually gone in the house yet.  I have a walk through in the next few days.  I will definitely know more after that.  I'm hoping that since it is in a nice neighborhood that it wont need a whole lot done.  House looks great from the outside haha!

 Property taxes are killer right now...