All Forum Posts by: Cheryl S

Jon - OK all those numbers are making my eyes glaze over. This would be a cash deal. So to get $100 cash flow, from $500/mo rent, I can spend max $28K (price + rehab)?

Keith & Craig - I got it at alibris cheap. coupon code: salinger
http://www.alibris.com/booksearch?qisbn=9780071603270&qwork=7835112#search-anchor

Thanks McKellar. Obviously, the condition is a huge factor. That's a given. Because restoration is the end goal, architectural style is important to me.

Michael - Thank you. I'm sure I'm underestimating the rehab costs. I was wondering how the rules worked. I would definitely have an inspection to see what I'd be getting myself into. And if I want to get into it.

Joseph - Thank you. I know that out of state investing is way harder. I would buy some older homes here in the Bay Area if I could afford it.

You're right about the emotion part. It's hard because of my goals. These are properties I want to eventually restore and become part of my "collection." I might have a gut feeling about a place, and want to get it. That's when I have to make sure that it's at least making a little money but definitely NOT losing.

Regarding CA - I swear when I look at other parts of the country, the cost of my modest house could get me loads more elsewhere.

Jon - Thank you for pointing out that I'm doing it backwards. Now, I don't know how to do it the right way. Do you have a formula to be able to figure out how much home I can buy based on the rents?

Craig - Thanks for the book recommendation. I will definitely look into that because I need it explained at a very basic level. I will definitely need help "mathematizing."

McKellar - Thanks for responding. Let's see...
1. St. Louis MO
2. I like the red brick and the architectural styles there.
3. The price and the fact that it is a multi-unit that is physically symmetrical. I know that sounds weird, but it's something I consider in properties I want to restore.
4. Absolutely not. I was throwing out a number to help me understand these "rules." An inspection and some contractor quotes will help me figure out if I can afford it.

Hello everyone,

This forum has been invaluable to me. Thank you for sharing your knowledge.

I live in CA, and I'm looking at a duplex out of state. No way could I afford anything around here.

Anyway, the duplex is $15K. One half is currently rented $475. The other is vacant and needs repairs.

So according to the 2% rule, I should be getting at least $300 in rent? I read on here that it is based on purchase price + repairs to make it rent ready. So if I put $10K into repairs for a total of $25K including purchase price, I should be getting at least $500?

I'm having trouble with the 50% part. What expenses does the 50% cover? The other 50% would be cash flow?

Sorry. I'm a newbie and tend to look at homes emotionally - since I want to restore them in the future. I hope someone can help me with the logic/numbers part.

Thanks!