All Forum Posts by: Rustin Dowd

Dang, very impressive man! Your success is determined by what you focus on. Even in the midst of all your adversity you kept pushing forward, it would have been easy to start feeling sorry for yourself and making excuses. Love how you responded!

@Harpreet Walia are you going to be coming down to KC to look at properties? I am an investor and have my own Real Estate Team here in KC area. If you give me your criteria I can send you some properties through the MLS. Let me know if I can help, thanks.

Rustin 

@Ian R. no secret sauce.. I just like foreclosure properties. All I do is search for foreclosure properties, or properties that I think might go in foreclosure and then go look at them. After I go walk around and inspect them myself I get a figure I want to buy it at. Then I watch that property till it gets to $15k-$20 above my figure and then I submit my offer. I like bidding on ones that the bank or HUD have had possession of for 4-6 months. I have only done two but so far it seems to be working.

Ok great, I appreciate all of the feedback! I am excited about this deal. I just had an inspection done and everything checked out great. I am moving forward with the purchase. 

A couple options with this deal that I have thought about

#1 Making it buy and hold asset and just renting out. 

#2 I have also thought about renting it out with the option to buy after a year. I have a few clients that I have through my business that are looking to buy but still saving for downpayment.  (I have heard that by keeping it for a year you will be in a lower capital gains tax bracket.) Is this true?

#3 Flipping it. However by selling it right away I am afraid that I will get hit with a huge capital gains tax. Unless I can do a 1031 exchange to buy my next couple properties. (Not exactly sure how all of that would work) 

@Gordon Cuffe Ok I will do that, thanks for your advice! 

@Austin Fruechting ok thank you, I appreciate the feedback! I would love to take you out for lunch sometime to pick your brain and learn from you.  Over 100+ properties by age 32! That is impressive, maybe my goals are too small! 

@Gordon Cuffe it needs minimal repairs. (Less than $6k). I currently have it under contract. Just wanting reassurance it is a good deal. I am new investor, this is only my second deal and I want to be sure I don't screw up.

Ok so I have a current deal that I know I can buy for $47,900. It appraised for $103,000 last year, it is a foreclosure property (divorce). So after looking at those numbers it seems like it is a great deal. However I know they are a ton of other factors that weigh in here. 

After using the bigger pockets rental calculator and looking at all expenses like property management, repairs and maintenance, cap ex, taxes, insurance, and vacancy my cash flow doesn't look great.  My gut tells me it is a good investment because of the purchase price and appraised value however the numbers I am running are telling me otherwise. Maybe my numbers are wrong but let me know what you think

----Here is the details-----

Purchase price: $47,900

Down Payment: 10% - 4,790

Rent: $800-$950

Vacancy: 8.33%

Gross Rent: $733-$871

Property management: (10%) $80-$95

Repairs and maintenance: (10% GR) $73-$87

Cap ex: (7% GR) $51-$60

Taxes (2016 Taxes $2,099) $175

Insurance: $100

Monthly Operating Expenses: $474-$513

Annual Operating Income: $8,800 -$10,453

Annual Operating Expense: $5,696-$6,157

Net Operating Income: $4,296

Mortgage Payment: $346 (15 year and 5.25% interest)

Cash Flow: -$87 - $11 (Gross Rent - Monthly Operating Expenses - Mortgage)

Thoughts? Is this really a bad deal or are my numbers skewed? I appreciate the help! 

Thanks,

Rustin 

@lindaweygnant I love that, it is a very fine line but after you create the lifestyle habits I think it is easier to stay on the right side!

@tedlanzaro I agree to a certain extent. As a business owner and investor I agree you should always be learning and providing value. Part of that in my opinion is being smart with your money. The problem I see with so many people (friends, friends parents, previous co workers) is that they see being frugal as a bad thing. I love my life and I live a rich life. By being frugal I will be able to continue to live a great life that I love as well as setting my family up to continue to enjoy all that we have been blessed with. It is a mind shift from I "need" to spend money on this brand new car, or I "need" to go out to eat because I "Deserve it" and I work hard. I love eating home cooked meals with my family, going out on date with my wife and driving a nice vehicle but I don't NEED those things to be happy. This addiction America has created of needing all of these materialistic things is something I am not buying into. I need my family and I always want to be growing (Education), and lastly I need to use what I have been blessed with to bless others. 

Thanks,

I appreciate all of the feedback!

@Rick Novotny No my properties are just south of Johnson County (Paola, Ks) However I am looking to invest in the KC area as well as Johnson County. I have also looked at the Raytown area, how are your rentals doing there? Would you invest there again?