All Forum Posts by: Rodney Kuhl

@Kenneth Hynes Thanks for running those numbers! I realized yesterday the PM should have been based off the Rent-Vacancy, so that changes it a bit. I also see 20+% returns based off of the numbers if you take out the $25/mo I set aside as "reserves" or for potential legal fees down the road, which basically could be included in the cash flow numbers to get $180/mo.

My long-term strategy for the property is to rent it out for a few years, how many depends on what else comes up. But I'm looking to acquire several SFHs over the next few years and continue trading up to bigger properties with more cash flow (-plexes, apartments, etc).

@Shawn Holsapple Haha, I love the bologna sandwich question!

@Shawn Holsapple Can I expected the tax assessed value to be the true assessed value of the property? The 2013 tax assessed value says $57,500. If I were to purchase it at $50,000, that would obviously be $7,500 in equity. I could refi for up to 75% LTV (making the total loan - mortgage + HELOC - $43,125). This would mean I'd originally put $10,000 down, but could pull back out $3,125, so I'd have $6,875 into the deal. That would reduce the cash flow to $130/mo but would increase the COC return to 23%.

Do those numbers look right/doable? Or am I off base here?

No seller financing as the reason he is selling it is to free up capital.

Thanks for all of your insight, @Matt R. !

@Shawn Holsapple Yeah, $200/mo would obviously be better. Is it better to sit on the sidelines and wait for a $200/mo deal or make a move at a $150/mo deal?

@Shawn Holsapple I totally agree and plan to use a good Property Manager. Being that this will be my first rental property, I figure the saving of the first month's rent would be worth my time, then once it's rented out I'd hire PM to take care of the property and free up my time. That is a great way to look at it, $50/hr vs. $75/mo.

Thanks for the clarification on the 2% of the assessed value. That would add about $10/mo in expenses. Still looking at $150/mo in cash flow and 16% returns based on these numbers. Do you think those numbers are good enough to make the deal?

@Rolanda Eldridge Thanks for the insight! Yeah, I definitely agree the greater returns is in buying rehabs. But if I don't have the cash to pay for the rehabs at this point, I still think it's a good idea to buy a property that won't cash flow as much but I can still make the down payment on, which I think you agree with by saying "getting started is the most important thing."

@Matt R. ARV would be about $55k.

@Matt R. It's a 3 bed/2 bath with a large loft that could be used as a 4th bedroom. Zip is 46226. I have looked on rentometer.com. I also know the house on the opposite corner is getting $795/mo. It was last rented at $775/mo until the tenants moved out.

I have walked through the property and it is true that the property needs virtually no rehab. I've come across it through a connection and the $50k price wouldn't be offered to anyone else. I am also planning on renting out the property myself (with help from a mentor), which will save me the first month's rent.

@Matt R. Roof and gutters are in good shape. That's a great point though, would be expensive to fix at some point. What returns do you look for in your rentals?