All Forum Posts by: Shawn Root

It's just strange. Initially, I thought that the two 16k numbers were the same thing and that I was getting a breakdown of the expenses-that-were-not-taxes.  The 2015 high level estimate shows separate numbers for expenses and taxes. The breakdown includes taxes in the 16k....of course in a different amount than the summary.

Ok, maybe someone can help me understand what's going on here. I saw a multi-family property in a nearby area that I thought looked interesting.

Details:

List Price: 259.9k

6 1/1 units

all recently upgraded with new paint, granite counters, etc.

I asked for financials and the RE agent has been very helpful contacting the seller, but what he is sending makes no sense to me.

1st attemp:

2013

Avg Monthly Rev                   $3,600.00   $43,200.00

Avg Monthly Exp                   $2,500.00   $30,000.00

Avg Monthly Pos Cash Flow $1,100.00   $13,200.00

2014

Avg Monthly Rev                    $3,854.00   $46,248.00

Avg Monthly Exp                    $2,300.00   $27,600.00

Avg Monthly Pos Cash Flow $1,545.00   $18,540.00

Then came the projection for 2015

2015 projected numbers:

Operating Income -      $45,360.00

Operating Expenses-   $16,000.00

Taxes -                          $8,000.00

Net Income -               $21,360.00

I was asking how the expenses keep going down. I wanted to know what was going into the calculations. I'm kind of a numbers guy. I just got this:

Property tax                             $575.00    $6,900.00

Insurance                                 $370.00    $4,440.00

Maintenance/Prep                   $267.00     $3,204.00

Lawncare                                    $85.00     $1,020.00

Nat Gas                                       $23.00     $276.00

Extermination                             $17.00      $204.00

City Fees                                     $6.00          $72.00

TOTAL                                  $1,343.00    $16,116.00

Aside from the fact that the info is inconsistent, what should I be asking about? On the surface, it seemed like a good deal for the price.

Wow, sorry about the formatting.  It looked ok before I submitted!  If it's too muddy to make out, ,let me know and I'll try to get it in the forum in a nicer format.

Ok, maybe someone can help me understand what's going on here. I saw a multi-family property in a nearby area that I thought looked interesting.

Details:

List Price: 259.9k

6 1/1 units

all recently upgraded with new paint, granite counters, etc.

I asked for financials and the RE agent has been very helpful contacting the seller, but what he is sending makes no sense to me.

Aside from the fact that the info is inconsistent, what should I be asking about? On the surface, it seemed like a good deal for the price.

@Katie Neason

I haven't done much real estate investing yet, but I did have to rehab a house once.  Contractors are a pain in the butt.  That's understood, but that picture you posted makes me question whether or not there is really four coats of primer and two coats of paint on it.  We had our kitchen cabinets painted in the house we live in and they are a manufactured wood product with a wood grain plastic-y kind of veneer.  The finished product certainly doesn't look like that.  I'm quite certain that the contractors that we used didn't use that many coats.  Also, I think my wife would have bounced that guy right out of the house if he talked back to her that way.

Those cabinets must be made out of ironwood.

Hello everyone.  Thanks for all of the great info on these forums.

A little history....

I have a decent job that I don't want to leave anytime soon, but I realize that I am not going to have the kind of retirement I want unless I start taking better control of my retirement money.  I have almost 300k sitting in some old retirement accounts.  They haven't been growing very much and I'd like to use that money to invest in real estate.  I was once an accidental landlord because I kept a home I had when I moved and rented it out.  I made many typical mistakes, including renting to family.  

I've been puzzling over the solo 401k and solo IRA options that some people are recommending and I'm having trouble working through the numbers, so I have a few questions.

1. Is the amount lost to immediate taxes and penalties really that detrimental over the life of the investment when you take into account the ability to do your own work on properties (cheaper) and things like depreciation. What about the UBIT? Does that change the analysis? If you are holding in an LLC, doesn't it have to pay some taxes?

2. Is it really possible to get non-recourse financing for properties held by the retirement account? How hard is it to find those banks? How onerous is it? How much extra in interest rate and how much less LTV will they loan?

3. The Roth versions seem like interesting options.  How well do they protect all of the income and profit from appreciation?

Thanks for your help.

Shawn