All Forum Posts by: Riley F.

@Brant Richardson

I believe that they are separately metered, though I will confirm shortly. The units are 800 ft 2/1s.

@Chesley White

Comps are reasonably tough to come by - it hasn't gone through appraisal, but I think that market value is $80-85 on the properties based on some VERY poor comps. I am still negotiating price right now - the above is where I think we'll end up landing, maybe lower.

@Caleb Asbridge

Thanks. Part of the reason I like this site is he different points of view.

@Caleb Asbridge

I will be using a management company. Vacancy assumption is 8%, though still works well at 16%. Management 10% and Repairs 10%.

The downpayment is out of pocket, not financed. No rent roll disclosure yet, just starting DD and wanted some opinions.

So are there any numbers that would make you consider the above, or is rural with a small population a non-starter for you?

The yield is very good, meets the 2% rule, but I guess your concern would be vacancy?

I should mention these are outside of Kansas City.

I am considering buying a package of 2 duplexes in a rural town, population of around 3,500, but stable over the last 10 years. The primary "industry" in the town is farming, along with everything associated with that, which is primarily blue collar work, and about 8% of the towns population is below the poverty line, with a median HH income of approx $40k. Grade school in the town, high school is a few mile bus ride down the road in another town. The duplexes are currently occupied and recently renovated, so presently they don't need much work. I grew up near many towns similar to this in upstate New York, so I am relatively familiar with small town dynamics, that is not a lot of moving, population growth, industry, etc. The people who life in the town are the people that are required to sustain the town, that's about it.

Numbers below are listed for the package of 4 total units (2 duplexes):

Price : $135,000

Rents : $650 per side (4 total)

Taxes : $300

Insurance : $145

Financing : 5.5% @ 25% down, 30 years

Curious to hear your thoughts. My concern is obviously the low population and long exit time if I decided to sell down the road. Thoughts?

Thank you everyone for the very helpful responses. I plan to use a Google voice account to screen and will return and text the folks that come in.

I am going to be sending off 500 yellow letters over the next couple of weeks, and will put up a post keeping everyone apprised of my progress.

Thanks again.

I have thought about kicking off a small mailing campaign of about 1000 absentees, and am curious to hear how folks on BP manage the initial call volume with full time employment.

Is anyone using a VA to take the initial calls and walk through a script?

Has anyone had any luck wholesaling in the Kc area? If so, I'd love to hear Fromm you as to what you are doing and if you are atill active in the market.

Thanks everyone for the responses. This is certainly why I posted the above. I guess I have misunderstood the 70% rule all along, which I was under the impression was applicable to flips with the following embedded assumptions: 1) 20% net return for the flipper, 2) 10% estimated holding costs / rehab overages.

My understanding was that buy and holds were judged by different metrics, namely price to rent ratio, cash on cash return, and cap rate.