All Forum Posts by: Sharon Tzib

Well, Chris, crime rate for one:

http://www.escapehere.com/destination/10-worst-cities-to-visit-in-the-united-states/7/

Texas still has great cash flows, healthy economy, excellent jobs outlook, and some potential for appreciation. If you already have one property there, it's doing good, and you have a team established, why not continue a good thing?

Not saying you shouldn't look elsewhere, but I'd be leaning towards SA if I were you.

Hey Kathy, you don't know until you try :)

And I was only suggesting using a SDIRA for the down payment, not to purchase outright.

If you don't mind me being nosy, Kathy, what kind of retirement account? I assume it's not a 401K since you're a realtor, so if it's an IRA, have you ever considered converting it to a Self-Directed IRA (SDIRA) and using those funds for the purchase of this and/or future properties (depending on how much money you have in there)? This could be done without penalty.

If you could come up with a down payment using a SDIRA, then you wouldn't need to pay more than this condo comps for, something which makes me uncomfortable about the deal. I'd hate to see you pay a $11K premium, sink $20K in upgrades into it, and then not have the market cooperate when you go to refi.

Ok, next questions. Where are you getting the money to make the repairs and later, to purchase the next property? And can you make the monthly nut without a tenant?

Kathy, do you have any sold comps on this property? You appear to be offering $10K over asking, which sometimes can be advantageous if your terms are favorable, but with a coastal condo in FL, could come back to haunt you.

You say you're going to amortize the note at 15 years, but only continue that for five years. What is your plan at the end of 5 years? If it is a refi, you need to make darn sure you have a built in extension clause in case you can't refi.

Does the HOA fee include hurricane insurance?

Have you ever rented a room before, and how will you feel about having your privacy surrendered on a daily basis?

Just some things that come to mind initially from reading your plan. Kudos to you for getting off the sidelines - better late than never as they say!

Hey @Dennis Treacy . This complex isn't distressed, as Brian has mentioned previously. The value add is via rent growth. Houston, along with some other large markets, are in for a perfect storm of low vacancies/high demand, which will increase rents, which leads to increased value. There's a lot of building going on in Houston right now to meet demand.

Hannah, the houses are really nice - great photos.

I would NOT assume landlords pay water/sewer/garbage. Where my rentals are, tenants in SFR's always pay. You need to find out what your competition is doing and do the same. That extra $115 a month is a lot of money (10% of the rent).

You haven't budgeted anything for maintenance, vacancy or property management. Even if you are doing PM yourself, I still budget for it whenever calculating cash flow in case something happens and you can no longer do it. So I'd take another 20% of rent for those things.

That leaves you:

$1100 Average Rent

- 675 PITI

- 115 Utilities

- 220 Maintenance, Vacancy & Management

$90 Cash Flow/Month

As you can see, if you are able to shift the utility payment to the tenant, you'll be looking a lot better. Good luck!

Welcome, Drew! Top wholesalers will tell you it takes about 5-7 touches before your yellow letter campaign will take off, so don't get discouraged initially if you aren't getting the response you want. If you haven't already, listen to Sharon Vornholt's podcast and check out her website - she's a wholesaling marketing genius!

Any reason you're only targeting one zip code? Is that a cost saving measure or the only place you really want to invest?

Good luck to you - I'll be seeing you in Houston soon (moving there later this year). Sharon

"PITI is $815/month. The houses next to me rent for $1,250 and $1,300."

Actually, I would have preferred just to see what your mortgage payment was, without the taxes and insurance included, so we could do a quick analysis w/ the 50% rule. It says:

Rent x 50% - mortgage payment = cash flow

Taking the low rent number of $1250, your P&I would need to be $625 or less for you to be cash flow even or positive. I think you're very close. Given the great shape of the house and the fact that you have equity and could walk away with a decent amount, sans cap gains, selling seems prudent to me.

As you said though, you're emotionally attached to this house, so what seems logical to us may not feel so to you. Good luck!

In the most simplistic terms, 4 or less units are valued by comps.

5 units and above are considered commercial and are valued by the income the property generates.

There is a ton of information on this forum to help you understand multi-families better. Search the term or go visit the multi family forum. You'll see deal analysis there all the time - it will help you get a handle on how it works.