All Forum Posts by: Bobby Hosmer

 Hi @Lisa Caracciolo

So the only thing I would be worried about off the bat is the age. 1908 is pretty old, and there are bound to be some deferred maintenance issues if nothing has been done in awhile.

350k might be a decent price, but how big are the 1/1s? That’ll help you determine what your arv and the rental rate will be. Based on what I’m seeing, 800 per unit sounds about right unrenovated, but keep in mind, you’ll have to compete with communities with nice amenities, dorms, university housing, and other on campus complexes. Is laundry what will set you apart and allow you to get $1,000+ rents vs a complex just down the street with security, a pool, parking etc?

Would love to run more numbers for you if I had more details on unit size (sq ft) and estimated reno cost.

Good luck!

@Travis Bryenton

No. I finance my properties.

Yeah, I think it depends on your strategy. Certainly, if you are a buy/hold investor, prices won’t play too much of a factor because appreciation has a chance of playing into your favor over the long term. Where you would benefit from buying now is locking in long term debt at a low interest rate. It’s unlikely rates will remain low for the long term. But also, who knows 🤷🏼‍♂️ 

Hi @Jennifer Reddig

I think there are a lot of investors still buying but I also know several who are holding cash and waiting. Curious what your agent said exactly that makes him/her so sure buying isn’t a great option. Interest rates are still at all time lows

Redfin, Zillow, trulia, realtor.com all are windows into the mls.. trulia just offers some crime data which I like looking at but I use all of them.

yes the crime map!! Haha main benefit of Trulia in my opinion. Good call out @Jonathan T Harned

No worries. Lots of different variables can play a factor in determining value

I just checked that neighborhood, and saw a few properties on the MLS which match your budget and criteria. Have you checked Trulia?

Hi @Augusto Celis

Welcome to the world of RE investing! Happy to have you here!

I'm curious, why are you so opposed to housing far from the freeway? You mentioned ROI but could you clarify where you are finding that data?

It’s just an estimate

7% sounds like a lot, but in reality, 7% of 1 year is just over 3 weeks. So let’s say you acquire this property and it’s 100% occupied.

When the first lease ends, you move in right away. Well during the course of that year, if you plan to raise rents to market rate, your two other units might sit vacant if/when the tenants move out. If each unit takes just a week and a half to get filled, that’s 3 weeks total, or just under 7% time where you don’t get rental income due to vacancy. You might not need to make any repairs, but during a turnover, tenants won’t be moving in and out of the unit on the same day. You’ll take a few days to clean the unit, change the locks, and do whatever is needed to make the unit ready for the next resident, and that could take a week.

Going into year 2, you could probably get aggressive and reduce your vacancy to sub 5% since it might be more expensive for your tenants to move vs pay for the annual rental increase 

Hi @Gabriel Morales

Congrats on the find! It’s great that you have some of the numbers listed, but you’ll want to try and get rental comps for the neighborhood where the property is located. That will greatly impact rents.

For example, you wouldn’t be able to use the gross rent or adjusted rent numbers, since you’ll technically be living in one of the units.

The numbers also don’t account for any vacancy. In my opinion, even a nice, renovated unit should account for 5-7% minimum. And that will still be across two units, not all three.

I would calculate as follows (based off not knowing the Tucson neighborhood in which it’s located)

Assume you move into the smallest unit and are managing it yourself ($0 for Prop Management), you’d rent out the 705 sq ft unit and the 619 sq ft unit, each renting at about $1.2 per square foot to be conservative 

Gross Rent [1,024 x $1.20]: $17,400

Vacancy at 7%: -$1218

Adjusted Income: $16,182

Expenses

Taxes [depends on area]: ~ -$1,550

Insurance [might find cheaper?]: ~ -$1,200

Management (yourself): $0

Maintenance [est 15% gross income]: -$2,610

Net Operating Income

Adjusted Income (kinda) - operatinf Expenses = $16,182 - $5360 = $10,822

NOI = $10,822

(You're getting an FHA Loan at 3.5% down, meaning your loan is $289,403; Assuming at 3% rate, and PMI your monthly payment is ~ $1,400 x 12 = $16,800)

NOI - Debt service = Cash flow

$10,822 - $16,800 = - $5978

If you have more details on zip code, I can provide more accurate tax and rent comps which may make this a better deal! Hope this helps

- Bobby 

Hi @Jeffrey Tully

Congrats on taking the next steps! I love talking shop, especially within the Tucson market. Please feel free to PM or text me at the number below my signature!

Best of luck as you and your fiancé begin your investing journey. Tucson is a fun place to start!

Bobby