All Forum Posts by: Sid Newstrom

Hello Justin,

I am just starting as well. So far I have decided that long term rentals are my mark. I looked at the cost of contractors, home values, and rent locally. In my current market housing inventory is limited and the builders are going crazy so large renovations or flips are out for now.(cost is to high) however, this makes a much better market for long term rentals as property value is rising and the city is growing at a rapid rate with a high demand for rentals (all relative to where I live).

These things helped me to decide. Maybe they will help you

Initially when looking for my first rental I wanted to use the homepath program in order to lower the down payment. As I ran tests on the numbers leveraging up seems to be a better way to go.

My initial question: Would any one recommend a lower percentage down payment as a way to improve the over all analysis?

and if so what financing strategies would be the best way to achieve this.

On my first home we used the equity of the house to finance half of the down payment. would something like that work to lower the DP.

This would be for a long term rental.

Thanks in advance.

thanks for the input everyone.

I passed on the deal. I had a couple friends take a look and everyone agreed.

Hi Kennith,

I will be managing myself. and thank you for the adjustments. the 571 is just because my mortgage calc is broke. should be 546.68.

Also right now I am not really looking for cash flow for the first couple of years just to break even and get my feet wet in a location that is familiar. What I am looking at is the appreciation in the property and the ROI. there is such a low inventory in this neighborhood I don't think selling it will be a problem. Maybe my train of thought is skewed. I figure if it doesn't work out as a rental I should be able to flip it. Any thoughts on this?

Thanks

Hi Max,

The loan doesn't not include PMI (homepath does not require it.) also the 571.53 I got from a mortgage calc. (maybe I should find a new one.) As for the total cost I used 11,500 for down payment + closing of 4500. Should the 15,000 in repairs be used instead of the down payment?

The expense I just really don't know what to expect. I estimated at 17% thinking many of the larger repairs would be negated with the renovation in the first year.

Really I thought the numbers looked ok. (rookie I guess) not great but ok. if you could elaborate on any ideal numbers I would really appreciate it.

Thanks for your reply Jon. can you give me some stats that you like to go by. I guess I am looking for numbers that would be ideal to you as to get a better idea of what to look for.

Thanks

Hi every one this is my first post and my VERY FIRST DEAL. I am looking to by a 3bdr 2 bath SFH. I have lived in the neighbor hood for most of my life and feel great about location but I wanted to see what everyone thought of my numbers. I believe all the math has been done correctly but would love any input you have. the cap and cash looks to be low but I should be able to sell the house for 145,000 no problem after renovations. (right now planning on buy and hold though) Also a block away is a condo complex renting 2 bedroom one baths for 1000 plus 275 a month for HOA. So I dont see a problem with rent prices. Please let me know what you think.

Here are the Numbers:

(pro forma, but I live three blocks away and have done so for 15 years)

Price: $110,000

10% down Plus closing 16,000

interest rate: 5.25 (30 year fixed)

roughly 15,000 improvements out of pocket.

Mortgage: 571.53

Rent: 1050 (this is low as market in the area is 1150)

6% vacancy ( average for the neighbor hood is 4)

Expenses:

total: 2200 annual

My results:

$134,500.00 total cost of unit

6.42 cap rate

9.127 GRM

11.10% Cash ROI

33.82% Total ROI

125.89% DSCR

$1,775.63 annual cash flow 1st yr 1775