All Forum Posts by: Sam Rust

@Anthony Dooley, Thanks for your feedback! I understand your cap rate equation, but I'm having a hard time wrapping my mind around your COC calculation. Below is my calcs using, am I utilizing the formulas correctly? Also, what cap rate would you personally aim for?

Thanks for your input @Justin R.! I'm trying to generate some free cash flow at the moment, and also start working an area for fix'n'flip. I think this property will help with the cash flow goal, and give me a valuable window into this micro-market as a potential for future investing. I'm going to look at it Saturday, we'll see!

Thanks for the replies! To clarify one thing, the units are on separate utilities and all cost associated with that and landscaping are handled by the tenants.

I'm analyzing a duplex deal in the the northern Denver Metro and want an outside opinion. 

Asking price of $365,000.00

Units were both completely remodeled in 2017, new electrical/plumbing/furnace/AC/roof/floors

Currently rented for a total of $2800 per month (I have verified the leases)

I figured the rates with 20% down, taxes and insurance included, and a lower maintenance budget due to the pristine condition.

I come up with a cap rate of roughly 8%, free cash flow of just over $11k per annum, and a CoCRR of 15%. 

This looks to me like an obvious winner, especially in these market conditions where duplex's are hard to come by. Am I missing anything?

Thanks in advance! 

@Account Closed It's not totally apples to apples in your example, to buy the preferred stock you need the $150k in cash, the same property in Memphis can be bought for $30k or less. Your gain may still be minimal from an appreciation perspective, but any returns you do realize are much larger (percentage wise) than that same or greater growth in the stock. Your greater point is still valid, but an argument can definitely be made for both sides.

Thank you @Jon Holdman @Jerry W. and @Bill 

@Bill S.! I am working with a local title company that just did my personal refi and am currently under contract. Excited to get this first deal done!

Thanks for the feedback, I will look into the forms you mentioned Joshua! I'm planning on renting out the property on a room by room basis, one of my sisters will be living in the house as well. I'm not sure if it will be a long term investment, but the deal was too good to pass up.

I'm putting in an offer on a house in Greeley CO that is off-market, but that I know the owner has expressed interest in selling. I've spoken with the owner, and they were receptive to an offer and are hoping to save on realtor fees (as am I). If they accept my offer, what steps do I need to take to "lock" the transaction down? If I write up a contract stating the purchase price, appraisal/financing/inspection contingencies, and time line and we both sign, is that sufficient? 

Thanks!

I had a friend moving to the Bay area that just paid a full year's rent up front, he has great credit, going to work with Tesla, no evictions, but didn't meet the income requirement. This was his only path to securing a house. Like Jd Martin said, depends on the situation.

I'm looking for a CPA here in the Denver area that is familiar with depreciation, cost segregation, etc. I am planning on doing my own bookkeeping, but would like to connect with someone now to establish a relationship and help determine tax saving steps before I lock things in stone. Do you have any recommendations? 

Thanks!