All Forum Posts by: Robert Horvick

@Kelsey Maren - nice to meet you and thank you for the input!  (And I'm also originally from MN - small world :)

It was digging deeper into rental comps that made this deal look a little less appealing - the comps on paper were good but the dated interior would definitely knock it down a bit.

The search continues!

@Adam Schneider - nice to meet you!

Our initial goal is rental providing positive cash flow ($250+/month to be worthwhile) and just getting something going. Appreciation would be great but I'm not counting on it as a short-term goal (i.e., we're looking to rent this for years, not flip).  We have other goals, but that's the goal with this first property.

The house is an hour+ out of the Triangle but in a populated area. It also has a dated, but a clean/rentable interior. If we invested in updates we could likely increase the rental value but it would not be necessary on day-1.

I think "just go it" might be our best bet. After digging into the more realistic rental numbers (looking at non-updated comps) the numbers don't make as much sense but I'm watching it. I'm a very analytical person and have a habit of enjoying the learning and research so much I sometimes get stuck,

In terms of cost estimating, a close friend is a GC in southern wake who does commercial renovations and rentals.  He has offered to join me on my first 5 or 10 tours to help evaluate properties and put together repair estimates. It costs me a decent lunch and a six pack but will definitely help mitigate the risk of big surprises.

Thanks!

@Mike Dymski - thanks! Changing those numbers does dull the shine on this a little as the rent is what BP and Zillow say but I think it's a little high for the market. There are comparables with similar rent but they are a less dated.

Appreciate the feedback and advice!

@Tim Delaney

Totally agree on the 10%. The report makes you pick a number so I stuck with one that was low but looked good to kind of make the point that even at that level it looked good. If more were needed I would bring more to the table.

Same for Capex. If a roof or HVAC (or both) were needed, that's annoying but we would be able to address it.

I guess what I'm really asking is "What are the other factors you consider to make sure the deal makes sense?"  You mentioned ensuring the initial financing is realistic, that there is an ability to handle unexpected expenses, and that the rental numbers are realistic.  If that's the big ones - awesome!

Thanks for your input!

@Kim Crouch - thanks. This property is well outside of Wake County. $109k here would be a burnt out shed. :)

I'll see about getting inside to check it out.

Thanks!

Robert.

@Jim K. - I sent you a message.

> 10%

It's not "allow" - it's just the number I put in. I'm following along with the BP webinars and basically pausing at every step and replicating what they do. I'm taking the first baby steps to learn how to analyze deals. They have used 10% in most of the webinars I've watched so I started there. What I normally do then is if things don't look like a good deal I start to adjust the numbers until I find what looks like a good deal. This one came out as a good deal at 10% so I used that as the starting point.

> Until then, you probably haven't gotten good enough yet analyzing Markets.

I don't disagree. My method of learning is to model behaviors, try them out, and ask questions. This is how I'm trying to improve a doing this analysis. 

I found a property on Zillow and ran the asking price numbers through the BP calculators and came up with $439/month cash flow at 39% ROI. Both BP and Zillow agree on the rent estimate and it doesn't seem out of line for the area (maybe 15% higher than I expected but still in the ballpark) I've only been researching properties for a couple of days (and still not made a first deal) - and this feels like it's too good. I have linked the report here:

https://www.biggerpockets.com/...

My question is if you were looking at this report and wanted to validate that the numbers were sensible - how would you proceed?

Thanks!