All Forum Posts by: Robert Leonard

As Anthony mentioned above, the (presumably) typo is causing some of the major numbers I'd look at to be off, for example, the Cash on Cash ROI. Removing the loan points and using the closing costs, repair costs and down payment as the "total cash needed", I'm getting a Year 1 Cash on Cash ROI of about 11.5%, which is a bit low. In general, I look for at least 30-33% for my Year 1 Cash on Cash ROI. Also, being a 3-family, you're averaging about $215 per month in cash flow per unit. That is not bad, but again, it's a bit below my personal minimum threshold of $250 (ideally I look for at least $300 in monthly cash flow per unit). It also seems your vacancy may be a bit low for my liking. I usually estimate about one month a year of vacancy (about 8%). This is likely on the more conservative side, but I'd rather be conservative and pleasantly surprised when I have less vacancy than expected.

All of that being said, you included electricity, garbage, and management fees. You could likely get the tenants to pay some of these expenses, and if you could manage the property yourself, you'd increase your cash flow a bit. 

My initial thoughts are this:

- the closing costs seem a bit low, but they certainly can and do vary from lender to lender

- the rehab budget ($15,000) seems a bit low to gain $121,500 in value - it is certainly possible, but you have to think, why has no one else jumped on this opportunity yet? 

It's difficult to give specific advice/feedback with the limited information provide and no photos of the property. On paper it seems great, I'd just be 110% confident in your figures.

@Dieggo Goncalves I will be there. If you see me, stop by and say hi. I'd be happy to meet you.

@Richard Lovering Likewise! Safe travels and happy holidays!

@Richard Lovering Completely understand! I (luckily?) get to avoid the hectic travel and stay local for the holidays. I will keep an eye out for him and definitely connect if he's there.

@Richard Lovering Will you be in attendance this month (tomorrow)? I will be attending with my REI partner for the first time. Looking forward to it.

@Nick Earls The prices in Worcester have intrigued me the past few months as well. The numbers on some of the properties I've been looking at are quite strong, especially for where I believe we are in the real estate cycle currently. Personally, I'd prefer to invest in "nicer" areas, but I'd certainly consider adding a few properties in Worcester if I already had a well-diversified portfolio in areas outside of Worcester. 

I’ve always found the concept of wholesaling interesting and it’s low barrier to entry as intriguing, but I always return to the question of, why? Certainly some point just want to wholesale and have no interest of going further into real estate investing, but for those who do, why spend the time and money marketing the deal as a wholesale offering, when you could invest the same time and money (maybe a bit more time) into finding other investors to partner with and taking on that deal yourself? If it’s truly that good of a deal, why would one want to sell it to someone else? Of course there are many different reasons why one would not want to own/manage the property and would rather just make a quick couple thousand dollars, but to me REI is a long-term game and I’d rather use the time spent in marketing a wholesale deal to find other investors to own the deal myself.

Unfortunately, I am just seeing this event now, four days after it has passed. When will the next event be?

When is the next event?