All Forum Posts by: Red Peterson

Thank you.. I needed to hear that. 🙂

Paid our home in full last November. We are ready to buy a rental property. Should I LLC now while looking to buy? I need pros and cons. ISO good to knows and things to avoid n forming an LLC; for example choose manager managed?… and go! (Thank you!)

BP has wonderful folks living here! Thank you everyone. I feel the property has prob been undermanaged. I did ask if there are known issues, current lease, & current home insurance cost. Expenses: Janitor $720, water $2094, repairs decor $907, and mngment $1577. Andrew, thank you for pointing out the tax being high (I think Im unaware ignoring that bec i like the property a little too much). My realtor sd she hasnt heard from RE agent, so i have a feeling theres an offer for it. Tempted to offer above list price contingent to home inspection but I dont have a lot of info about the current lease terms im afraid I might get stuck with terms. Im not sure if I’ll be aggressive or find out more. Things are going fast so… ugh. 

Yeah, youre right. If I do 30yr, mortgate is $1200. it is a bit difficult to remember this is business and it scares me a bit to owe again. I will run numbers again.

But anyways, I will look up capex bec i dont know what that is. So, the tenants in this property have been there 10yrs, 8yrs, 5yrs, and less than a yr. The 3 will probably live there til they die and im not exagerrating. The property sits in a really good location. We are a small rural area and this property sits in the middle of town. I anticipate our town getting bigger in the next 5-10yrs as people have been moving in town recently.  I like the location of the property and fact that 3tenants are long term. Vacancy will be in one unit maybe every 2years or so, and this unit is the only one that has been updated. 

The building is $165k. (They put this up in 2015 for $190k; on and off over the years and the lowest price they came down to was $150k in 2018) Ive watched the market in my area it I think its fair(?) for the location but, I am scared there are hidden repairs that will blow up in my face. Each unit has one person living in it so the wear and tear is slower compared to more people living in a property. With the price I can start RE and learn and have moderate issue with tenants. I plan to slowly update the building and possibly even make it higher end in later years bec of its location. If I tackle a major reno 2 units can be two bedroom, they have the space. The rent right now, is just a littler under the going rate in my area for 1BR bec theyre dated. I can probably raise it a little. I asked for copy of current lease so I can review it and see when I can make changes. The current property management charges $1577 a year. The monthly mortgage will include tax whether i go $1600 or $1200 (15 yrs, 30yrs loan). Tax is $7800 last year, its been slowly creeping up. 

4 - 1BR property up for sale. Very old bldng and dated. Seen this property on and off market since 2015. Tenants are long term been there 4yrs and up (and get along), and one is less than a yr. If I do 15yr mortgage, its around $1600. Tax $650. Total rent $2100. My worst fear is the age of the bldng and possible big repair. It’ll be my very first RE investment so I am unfortunately in the stupid, new, naive, and excited category. Any tips from experts and experienced investors out there? Im planning to offer with contingency to home inspection, if we move forward. Should i bite this one? 

@Jacob Pereira hahaha! This is getting me all excited and I cant sleep!!!

@Jacob Pereira wow. 20% and a 30 yr note. Thats it!!! I get it now! Thank you!

@Dan Guenther Thank you! 🙂

How do I calculate my CoC on my rental property thats paid off?

Do I need to consider the total $ paid on the property or just the cost of maintaining the property?

Easy.. noob here. 😅