All Forum Posts by: Steven Barr

@Jason Bott I imagine you can’t use hard money to buy fire damage properties then? As they would want insurance coverage

What do y’all think about flipping properties that have a sizeable amount of fire damage?

Are there too many unknowns? Does it require pulling permits?

Thanks!

@Marcus Auerbach what do you mean by 45% expenses don’t make sense? Are you saying that’s estimating too much? Or it’s a bad property if it’s that expensive

my breakdown of 45% is as follows:

Property mgmt: 14% or roughly $350/mo (assuming 10% of monthly rents and a fee of 1 months rent for placement with tenant staying for 2 years…. So 250 for monthly rents plus 100 for 2500 placement fee spread out over 24 month period)

Turn cost: 3% or roughly $75-85/mo assuming $2k of repairs necessary to turn it 

Vacancy: 4% or roughly $100/mo assuming 1 month to locate and place tenant in 24 month term 

Insurance: 4% or roughly $100/mo (using one of my properties as example here)

Property taxes: 9% or $225/mo (using on of my properties as examples)

Capital expenditures: 3% or $75/mo (amortizating roofs, hvac, water heater, etc… over their useful lifespan)

Operational expenses: 10% or $250/mo

So technically 46% in total. Somewhere between $1100-1200/mo roughly is the estimate

@Sam McCormack can you provide an example of a creatively financed deal and how it would provide better cashflow than 20% conventional?

@Eliott Elias do you mind sharing your numbers?

(I also just realized I pressed wrong number on my calculator for expenses. Should have been $1125. So my example is actually more break even. Still not great and no cashflow)
 

Birmingham is a very tough market. You can’t go by “area” or even “pockets”. It’s street by street. One street makes a world of difference between minor and major crime.

For section 8 specifically, lots of West coast investors came in over the last few years and bought a ton of homes which has given Sec 8 tenants a ton of supply to choose from. Very common to see them stay in a house for 1 year there, trash it, and move to next one

Not to say you can’t make it work, but much harder than just going on Zillow or to a wholesaler, buying a 70k property, and cashflowing 

@Fernando Figueroa what do you mean by “do the numbers the other way around”?

With home prices still very high and interest rates now high too, is anyone actually cashflowing on newly acquired property? Even the 1% rule doesn’t seem to work anymore 

Example: assuming 20% down

Purchase price: 250k

Rent: 2500/mo

Expenses: 1375/mo (45% expenses)

Debt service: 1350/mo (200k at 7% fixed 30 am)

Cashflow: -$225

@Nathan Gesner super helpful thank you!!