All Forum Posts by: Steven Lewis

If the "all cash" is money you saved up from another source, there's certainly less profitable places to put that much cash, so from that standpoint it's not bad (about 6% annual return, not considering maintenance, vacancy, capital expenditures). If the cash came from another source - HELOC, HML, etc - it is not a very good deal. Further, if you had to leverage it in order to access your cash, you would be upside down, so from that point of view I would try to put every penny you get from the property in rent into a cash fund so that you rebuild (assuming you need to rebuild) your reserves.

I wouldn't worry too much if it was cash lying around, however. Even factoring in vacancy & capital expenses, you'd be clearing 3-4% return, which is something. And you did a deal, and get to learn from doing a deal.

Thanks Jd. I did not leverage anything to access the cash, nor take a HELOC or HML. Could you advise on the percentages you would account for vacancy, capital expenses, etc so that I could keep a look out of my numbers for future properties?

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Originally posted by @Mike Wood:

@Steven Lewis Thanks for sharing. This is not a deal that most people would be crazy about. You are basically renting it for the same price that a buyer would be paying, if they financed it (assuming 80%LTV @ 4.25%, 30yr).

By my numbers, if you had financed the property (at above terms), your total payment would be $1452/month, leaving only $148 to cover repairs, vacancy, etc.

Since you were able to pay cash, that leaves you in a good position from a cashflow standpoint. Hopefully there is some property appreciation in your future, to make it more appealing to you.

I have one condo unit that I own and rent. I bought it to live in, and after moving out there was no way to sell it without taking a huge loss (we purchased it in 2007, pre-crash). So I rent it out at market rate, which puts me in a -$150/month cash flow. That and the restrictions with condos, means I am not a fan of them.

What percentage would you say would be a safe number to set aside per month for repairs, vacancy, etc?

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Originally posted by @Jeff Rabinowitz:

Congratulations, @Steven Lewis. You are a real estate investor. It looks like this is cash flow positive even allowing for vacancy and maintenance (which you should always account for). That is a phenomenal rate on the insurance. What could you do better? Buy for less, of course, but if your goal is to begin to build a portfolio of cash flowing properties you have taken the hardest step and are on your way.

Thanks. You mentioned allowing for vacancy and maintenance costs. Could you advise what percentage you would set aside for those costs?

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This was my first investment property. At 25 years old, I did my first investment with 2 years of real estate experience. Knock on wood, I am doing well with it but wanted to share my numbers and see if I could get some constructive criticism for my next investment purchase.

This is a 2 bed, 2 bath condo in New Jersey.

Purchase price: $189,000 all cash
Taxes: $334/month ($4000/yr)
Insurance: $19/month ($219/yr)
Association: $351/month
Rent: $1600/month

I've seen many formulas to calculate whether a deal is good or not. But since the property is already purchased, looking to know after the fact if this is a good deal, and if not, what could have been done better?

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Originally posted by @Percy N.:

@Steven Lewis in addition to the advice you get from @Upen Patel, have you tried reaching out to the portfolio lenders in your area? Have you looked into a commercial loan? You may even be able to get a blanket commercial LOC for the investment properties.

Commercial loans would be higher interest? Probably a minimum as well. The investment property is roughly only $200k. Most commercial loans are min $500k.

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@Dan Perrott

Thanks!

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Where I am located, many of the units fly off the market. Since it is so competitive, my tactic is to submit a lease application prior to showing the client the unit, and in most cases, the client is okay with that. Most times, we end up winning and I am able to secure the deal for them - making one happy client.

On the other hand, I have stubborn clients who don't want to submit any paperwork until they see a unit first. This sometimes ends up me driving around endlessly showing unit after unit and they find a leasing office to use rather than use me. I want to show value by asking for paperwork upfront but at the same time not to scare them away.

I am seeking advice how to engage with a renter and gather their credit report and lease application prior to our first meeting. Would also like your opinion whether you should submit an application first, or show them the unit before submitting any paperwork.

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I have been looking for Meetups in the NYC/Jersey area.

Where are you finding these meetups?

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I am looking to buy a multi-family home.

Simply put, can you get pre-approved for a mortgage for a "larger" amount using projected rent?

Example: Pre-approved for $200k for a single family home. Multi-family home costs $300k. Can you use the anticipated rent to get you pre approved for more?
If so, would it have to be through private lenders?

Any leads? I live in and looking to purchase in NJ.

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All Forum Posts by: Steven Lewis

Steven Lewis has started 20 posts and replied 50 times.

Post: What could have been done better?

Post: What could have been done better?

Post: What could have been done better?

Post: What could have been done better?

Post: Purchasing Second Investment Property Advice

Post: Submitting Rental Application Before Actually Showing Client?

Post: Submitting Rental Application Before Actually Showing Client?

Post: Submitting Rental Application Before Actually Showing Client?

Post: How to start wholesaling in New Jersey, but live in New York????

Post: Getting Pre-Approved for Mortgage Using Projected Rent