All Forum Posts by: Samantha Soto

Turns out I did do my math wrong on the second property. I had forgotten we received a $5k seller credit at closing. So instead of my NOI being -4422.03 it was actually $577.97. Our ROI was actually 3.8%, still not great, but a lot better than -29%!

So @Lance Robinson when you calculate it each year, are you only looking at the NOI from that particular year, or total NOI since you have owned it? If you ended 2017 in the red on a property, do you start 2018 with a clean slate, or still in the red for your NOI?

Oh Geez, if I did this right my other property is performing at a -29% ROI and we had anticipated a 6.66% ROI. Way too many expenses have come up on the 2nd property, including a tenant turn, replacing all of the windows, rodent maintenance...and now to start out 2018, a new HVAC is needed. Hooray for Capex repairs!

I'm going to show off how horrible I am at math right now. It had not occurred to me to continue calculating ROI after purchase, although it makes a ton of sense. I tried to google the best formula to use and came up with NOI divided by total cash initially invested. Does that sound right?

So for my example, I purchased a property with $19,716 total in to make the deal happen. After a year and a half, the total cash I have made, minus actual expenses is $4,132.92. So if I am calculating correctly I am coming up with .2096, which is essentially a 21% ROI, right? So this is my actual ROI thus far for this property.

When I initially run my numbers, I account for putting money aside for vacancy, capex, maintenance, etc on a monthly basis, and my ROI looks like it will be much lower. For this one, I had calculated a 9.68% ROI when I purchased.

Would love some feedback on if I am doing this correctly.  Thanks for the inspiration @Lance Robinson.  I'm going to start tracking these numbers yearly as well.  

They are on a month to month and I just spent $150 obtaining a 9 page single spaced iron clad lease from a local attorney.  I intend to get it signed at the end of this month if tenants are willing to, otherwise end of next month.  

@Account Closed , that's the plan.  I'd rather try to retrain them and keep them then have a turnover right when we buy the property.  We will cut them loose if we have to, but I think the old landlord just made it too easy for them.  

These tenants have been in the building since 2014, so they are relatively longterm.  Over the 4 years they have lived there, they owed the previous landlord almost $1500 in back rent.  Their payment is $600/month.  I guess if you are looking at 48 months, missing 3 months rent isn't the end of the world, but it's not a problem that I want to allow to continue.  The landlord in the past has worked out various payment structures for them.  I am hoping to retrain them.  I do like the way @Joe Splitrock put it, as adding a buffer.  I know we will have to evict if things keep getting off track for them, but I'm hoping that they will see that we are less flexible than the previous landlord (as evidenced by actually using late fees and following through with filing evictions), and will get their act together.  This will be our first property to self-manage.  Quite the learning experience!

Of course, everyone would love to work with a better tenant class. But at this point in our REI journey this is what we can afford.

@Jon Holdman I would thoroughly explain to the tenant that there is a difference in amounts between the two choices.  They are paying a premium to be able to pay bi-weekly.  I wouldn't be trying to pull the wool over their eyes.  But if they want the flexibility I think it's a fair arrangement.  

@Megan Moody , so instead of saying "Rent is $600/month payable as $300 on the 1st and $300 on the 15th" you structure it so that rent is $300 every two weeks...eventually netting more than you would had rent just been $600/month?  Just making sure I understand.  

I like this idea because it rewards the tenant by allowing flexibility with their rent payments and rewards me with a bit of extra cashflow.  It looks like that actually nets me a full extra month of rent over the course of the year.  Which would also help me recoup some extra to add to their security deposit, since prior landlord only charged 1/2 month rent for security deposit.  

I don't think I understand the question.  Are you asking about the overall market, or a property in a specific area?  They are good areas and not so good areas.  That property could be valued very differently depending on where it sits.  Can you give some more info?  

We have used Shawn Huss at Chemical Bank on two loans so far.  I also refer him to a lot of my clients.  He gets things done quickly and is very responsive.