All Forum Posts by: Rob Simpson

@Nathan Gesner, good questions and my properties also tend to be 50%.  Here is what I have, as per a flyer:

Contract work:  18228

Lawn care: 4500

Taxes: 30,189

Trash: 4,410

Utilities: 15,231

Insurance: 4,750

Maintenance: 12,000

Reserves for replacements like roof: $12,000

Folks are encouraging me to seek private investors to help me with a deal.  This would be the first time I have approached anyone that isn't a big bank, so I'm unsure if what I am offering is enough to whet the appetite of someone with Bigger Pockets than me.  I'd appreciate some pointers from anybody that has worked a deal with a private investor to tell me what they'd do/offer differently. So, what I've put together below are some of the numbers I'm thinking.  I used 15% (simple) because it represents a "middle of the road" return compared to the volatile S&P 500 index over the last 5 years.

Would this tickle your investor's interest?  If not, why not?  

Has anyone experienced this, bought the property anyway, and have some wisdom to share?

This property I'm looking at boasts "huge upside potential" if rents are raised to the market; but, they're also showing a 9% vacancy cost in their rent rolls.  I've seen this on some other advertisements, and I question why a place would have nearly that much vacancy if they are below market rents. 

I'm just shy of 40. I have 8 doors in my LLC (4plex, 3plex, SFR). I want 40 doors, but life took a turn and I had to put my RE journey to the side. Now, I'm back to where I need to be, and I'm confident that I know the game well enough to step-up my acquisitions--i.e., I am confident I can take on larger properties and turn a profit. I found a16-unit complex for sale and I think it's the one for me. The trouble is, I can't go to the traditional bank because I am not able to put down enough cash. I have 100% equity in all of my properties; but, traditional banks won't touch it as collateral. So, I am looking at alternatives. So far, hard lending seems the route to go; but I'm afraid of the rates and the fact I want everything to go through my LLC will turn lenders away. Does anyone have a story they can share to give me some hope?

I have a handy spreadsheet that helps me quickly assemble the various numbers (ROIs, cash flows, etc...) involved in assessing a properties potential. When a property's ROI is just shy of my return objective, I often ask the seller if he'll come down on price first so the numbers fit my goals.

More often than not, I find adding back the cash spent for a professional property manager will put the returns back into my target return range. This got me asking myself if it was appropriate to build in that cost to my estimates (and by association, my negotiation points). I am not sure because:

(1) The choice to hire a PM is mine, not the seller's, so why should the seller come off their asking price to accommodate my personal choice?

(2) But counterpoint to (1), I've read (on this web site, no less) that a responsible investor tries to paint as complete a picture as he can during his pro forma, therefore it is prudent to include the costs of the PM.

Please note: I live abroad and have for a few years. I need a PM to help me because I cannot be there to do the job myself. Just wanted to clear that up before someone asked the question "Do you really need PM?" The answer is yes.

So, all that said, how do you feel about including PM costs in a negotiation with a seller?

I had one instance where this worked in Southwest Florida. I had one person sign a lease to me for the full rent amount and period. I then told him to bind everyone else in the house to a roommate agreement which split different costs and responsibilities. Each new roommate triggered a new roommate agreement, but my primary was always on the hook to me.

Another topic spurred me to asking this. Does anyone know a lender that accept credit cards for mortgage payments? I understand it is a risky move for them; but, maybe there is one out there?

I'm one of those people that likes to rack up points/rewards by paying my bills on my cards, then pay off my credit card the next day with a funds transfer from my bank. If I could pay off mortgages on my card, I'd fly a lot more!

Also: yes, I know it's risky for them. Let's not belabor the point. My credit rate is 9% and has a limit of $5,000; so, my risk is limited, too.

This could be a great topic! I often wonder if, when I am ready to pass on a legacy, what I will pass on, how, and to who.

Hi, Ms. Poe.

I still owe ~150K on it. I used $140 in my example just because it made the example I gave easier to compute.

Zillow tells me the house is worth 140K. The comps in the area are comparable; but, I think I could get $147k to $150k. I am faced with trying to break even at best.

Brian Hoyt, it was my primary residence for 5 years until I had to move away. Rents in the area have not supported what it takes to cover my expenses plus necessary reserves.

Bill Gulley and @Jon Holdman, sorry for the confusion. This is what I originally tried posting before I had a mix-up with the web site. Thank you for your replies!

My end goal is to divest myself of the house while paying off the mortgage I owe. I read offering seller financing can make that a more attainable goal along with some added benefits, e.g., interest payments.