All Forum Posts by: Steven Loveless

Not sure exactly what to make of the chart, I have seen it in several other places. As @Joe Villeneuve said though, if this data was available broken down by market area then it would be REALLY interesting.

On a side note, you can also interpret the graph this way: healthy "normal" macro ownership rates are really between 63-65. The run-up culminating in 2007 could be viewed as the anomaly driven by external forces other than just the market, and we are finally returning to normal. In this interpretation, (not saying this is correct), you could argue that the macro picture has finally sloughed off all of the peak craziness and is ready to grow again. 

Best I've been quoted in the last month is ~4.4%, that is in the $150k-200k range with 20% down, 800+ credit, and high income to debt ratio. That was from a big bank, and it would be my first investment mortgate. It seems like most of the replies with lower rates are from local credit unions or smaller banks.

Good luck!

Thanks for the response @Chris V. - very detailed and informative! I appreciate you taking the time to go through that for me. (If you can't tell I'm a data junky and definitely err on the side of over-analyzing.) You are dead on with the assessment of what the majority of the posts are like, and I can only presume that your reasoning is likely right as well since I myself am new.

I'm going to take some time and review your numbers in comparison to mine, you have an interesting strategy as far as repairs go. You bite the bullet on the front-end to minimize ongoing operational costs. This data will really get interesting in about 10 years to see how that pays off for you! 

It seems like you know what you are doing and doing it well, and thanks again for posting this kind of info - awesome stuff!

Great post. Three quick questions for you:

1. If you break out a vacancy cost (difference from gross scheduled rents & your actual gross rents) what is it over this timeframe?

2. Can you break out the expense a bit more? (repairs, insurance, taxes, etc.)

3. On your triplex sheet, 2014 shows ~$11k/unit bump in total investment, but not in the cash investment for CoC return calcs. Was the rehab financed?

I'm guessing you are doing all of the management yourself.

Again, great post - I wish more people would post this kind of info. As a newbie looking into buy and holds, this type of analysis is so much more helpful (both in mindset & analysis) than simply bantering about rules or anecdotal stories without the numbers behind them.

Thanks @Atwan Kwan - I agree I really need somebody other than my relative on the ground to help me out. I can maybe get out to the house once before my relative wants it sold, probably not enough time to really network the area well. I am starting to call PM's today.

Any Fort Smith area folks have recommendations for trustworthy property managers or RE agents?

I am looking at possibly purchasing a house from a family member's estate, and need some opinions on the Fort Smith, Arkansas rental market. I really didn't intend to own rental property from a distance, but I may be able to get the house at a significant discount.

The house itself hasn't been updated for some time, so will likely need a bit of work (built in '63 I believe). It is ~1800ft2, in what appears to be a decent part of town just northeast of the 540-22 intersection.

Does anyone have any info on what rental market is like here? Also any recommendations on property management companies or trusted contractors to estimate repairs?

I guess the biggest question would be what your current home looks like as a rental. If you would buy your current home right now as an investment property, then keep it as a rental when you move up. If not, you might want to sell it and either just put the equity into your new home, or go get a better investment property.

I would take current value of the home, subtract out the costs to sell (6% realtor fees + closing costs), and use that value as the basis for your rental analysis. If it hits the numbers that you would consider a good rental, keep it.

There might be some tax considerations though, I think if you keep it longer than 5 yrs the tax basis will be your original purchase price and you might have to pay cap gains on all of it. If you sold now, you could get the homeowner exemption on the capital gains. I'm not positive about this though, so talk to CPA.

As to buying the new house, it's all about priorities. Do you want a more comfortable situation right now (bigger house), or to jump-start investing with the capital you would deploy - ask your wife, she'll probably make the decision for you anyway. (Or at least that's my experience! :) )

Good luck!

Thanks @Ryan Johnston! That is a ton of good information - that is one of the primary areas I have been looking at. I really appreciate you digging into the details for me.

You might want to think about creating a separate maintenance/repair category other than capex. Could include your turnover costs and other miscellaneous expenses that are not actually capital exp. Also allows you to get more granular on what your tax implications will be.

I'm a newbie myself, searching for my first deal - but I am running a lot of numbers recently.

If I understand correctly you are building a home for yourself that is actually a triplex, and renting out the two other units for $600 each?

Plus renting your parents' old home for $1k.

First, I would suggest analyzing the two properties separately, as you really have two completely different deals. That will give you an idea of the return for each property.

Keep in mind there are a lot of costs other than just the mortgage cost. You have taxes, insurance, repairs, capex, property management (even if you do it yourself, pay yourself!), & vacancy/credit loss. Those are all going to add up to significantly more than $200/month.

For people to be able to help you with the numbers, do you have the following numbers:

Parents house:

current value, estimated repairs needed to rent, estimated monthly rent.

Your new house:

What is an estimated rent for the main unit that you will be occupying? Without knowing how much of the value is derived from it vs. the two basement units, it's hard to tell if they are worth it.