All Forum Posts by: Andrew S.

Well, the moment of truth: the house is one of the smallest houses in incredibly affluent town, 4 BR cape; was listed at 479 but looks like will accept 420k. 

Here are the numbers, with a qualifier: We MAY want to stay in the house for 5 years for the great high school, and use our primary home (much nicer) as the "weekend getaway". 

420 purchase price. 

tax 6700. Insurance est 2000 (big umbrella); repairs 2000 total 10700 expenses. 

Projected rent 3000/month, x 11 months = 33k. 

33,000 - 10,700 = 22,300. 

22,300/420,000 = 5.3% return. 

Just buy a federal tax free Muni (5.6 taxable equivalent) with the 420k and rent if we decide to go the high school route?

thanks!!

Hi smart real estate investors...

Newbie here. Quick background: I have great day job, and high-pay profession, on track for retirement, but when I almost bought a deferred annuity for $550k (starts paying around 40k/year in 12 years), I realized - wait, I should buy rental properties with that cash instead!  I also just got a business cash windfall of around 800k...

So I'm looking at 2 2 BR SFH - in my neighborhood with 400-1.4M homes, each around 220k, and each with tax around 5500/yr and potential rental at 1900/month. I'm also looking at 2 4 BR 430k homes, with taxes around 6600 and rental income at 3k/month.

I know none of these properties pass the 50%, 55%, 2% rules, but they are in solid areas with low rental inventory, top schools.  The 2 2BR properties would each bring in 12k after assuming vacancy/tax/insurance/maint, or 12k/220k = 5.4%. 

The 4 BR 430k properties would each yield 20k/430k = 4.6%

I want to diversify into these properties since I have healthy fear of stock/bond downturn, and I enjoy the work (had a few rental homes in my past). The $440k homes are actually homes we may move into for 5 years to enjoy the excellent high schools. 

Have separate question of cash or leverage, for another time....

thanks!