All Forum Posts by: Robert Leonard

@Matthew John Exact same thing for me. I am waiting on my paperwork from Wells Fargo. For you, even at a $44/month savings, only takes 2.4 months to recoup your investment in the BPO.

Robert Leonard

@Jene Goshay In short, not a good deal - I'd keep looking.

Also, if your purchase price = down payment, I'm assuming you're paying cash. If so, you shouldn't have $40k in closing costs. $2k in repair costs is arbitrary on a ~$1.9MM property. Also, your vacancy, CapEx, Repairs, and Property Tax estimates are all too low, in my opinion. I don't see you paying ~$2,400 per year in property taxes on a $1.9MM property...

Robert Leonard

@Xiao Xiao your assumptions are reasonable except I wouldn't assume 10% for CapEx and Repairs, each. I'd assume 15% total (split 10/5 or 7.5/7.5).

That being said, this deal is not worth it. CoCROI and cash flow are just too low. I'd keep looking for better opportunities.

Robert Leonard

@Kyle Joseph Yes, he is. I went last month.

Robert Leonard

@Dylan S. Very interesting - our fence and yard work was upwards of $10-$15k. I'll have to risk the $200 for the BPO and go for it.

Robert Leonard

@Ankur Agarwal cash flow looks strong, but you have $400k input as the closing costs and this is throwing off your CoCROI. I’d be curious to see what that turns out to be once the closing costs are corrected. Also, the vacancy seems a bit low, I usually shoot for 8-10%.

I’d correct the closing costs and re-upload. Happy to provide feedback then.

@Jason Medina without knowing the specifics of the deal, your expenses seem to low. I usually estimate 8-10% on vacancy and a total of 15% for CapEx + Repairs. You might be able to get away with a little less due to the rehab, but even with your current estimates the monthly cash flow is far too low. I'd keep looking.

@Russell Brazil they add value in my market. The hot water tank not so much, but the last one failed so it was a replacement out of necessity, not to increase the value of the property. The fencing increases the value of the property because it makes the yard actually useable, where it wasn’t before. However, both improvements likely cost more than they increased the value of the property. The property value has just risen dramatically due to natural market conditions in my area.

@Jaiden Olsen thanks! Ill have to see if the improvements are considered “enough”.

@Jaysen Medhurst I will look into that, I’d just prefer not to pay thousands in closing costs just to save $100 a month.