All Forum Posts by: Steve TeRonde

 Why would the return on investment go up if I did a cash out refi and now have a mortgage?     I probably wouldn't be cash flowing at all at that point but I'm guesssing I'm missing something as I'm not a finance guru.    I'm just a guy who is handy and wants to diversify away from the stock market.     My thinking is that if I ended up with about 10 properties, I'd have around $10k/mo passive income before expenses.      

I'm not seeing anything in the calculations about tax write offs for repairs to the rental properties or anything about depreciation.    Aren't those two factors important in determining the actual rate of return?

I found a website "affordanything.com" that has a detailed explanation in layman terms of the items in Bram's  analysis.    Is this stuff really that complicated or is there easier back of the napkin math?     I'm pretty good at estimating repair costs.     It seemed like a no brainer to buy a property for $30k and put $15k into it since I know the rental market here well.      

I'll have to look up "opportunity value".     

Why would I want to refinance the rental house and then have a mortgage?    Is that simply to have cash to buy another property?     Both my properties are owned free and clear right now.     This house I just bought was available because the previous owner overleveraged himself and lost everything when the Great Recession hit.    I'm concerned about over extending myself.   

Wow, thanks for the detailed breakdown.

$50k was my all in including closing costs but wow do the numbers seem low.      Is there a section on this website where I can learn how to do that breakdown you did Bram?

As to how I got the property taxes reduced, I simply went to the village assessor's office and filed a protest the day I closed.    The assessor had the house taxed at a value of $78k.     My protest was successful because the purchase was an arms length transaction.     So for next year, the property taxes will be based on a value of $30k.    I spoke with the assessor prior to making my offer on the house and incorporated the projected tax savings into my offer.    

It appears I wildly over estimated my ROI though. Isn't it as simple as taking the net yearly profit and dividing it by my total investment of $50k?

Why are the numbers "great" with an ARV of $75k? I went $5k over budget due to subbing out a bunch of work at the end after school got out (got a little one living with me). If I sold the property, I'd be on the hook for short term capital gains and would not make much money for the amount of work I put into it. I wasn't planning on selling but I'm really not interested if I'm only going to make $15k or so after working hard for two months on this place.

Thanks for the insight. I have an acquaintance who is a pretty big player in Chicago and his napkin math showed the ROI similar to yours but we didn't have much time to talk due to the flooding and all the help my neighbors needed.

I'm a bit new to all the terminology.      I had a new roof and new electrical done as well as the plumbing completely gone through (house froze for two years).      All new light fixtures as well as a new kitchen.     The furnace was gone through by an HVAC buddy and the water heater is newer.   So I'm assuming my capital expenditures (big ticket items?) should be very low.    

My maintenance should be close to zero the first year due to helping one of my contractors save his house during the record flooding last week.

I assumed a vacancy rate of 1 month vacant every 12 months.    

I live a block from the property so my Property Management costs are zero.     

As to ARV, my buying agent estimated $80k-$90k. I feel she is high since I know every property on the market in my area and know my specific area well. Maybe I'm wrong but I'd rather be wrong to the low side.

Insurance (rental dwelling policy) is $55/mo.

I have to say, your numbers came in quite a bit lower than mine and frankly sound horrible. Are you guys saying the ROI is good?

I purchased a SFH for $30k cash in June. I put $20k in repairs into it. I have a tenant moving in August 1st at $895/mo. It's an 800 ft2 2/1.

My property taxes for this year are $3000 but are going down by 64% for 2017 due to a successful protest. My rental dwelling policy is $55/mo. I'm starting a Series LLC next week and putting my two rental properties in it. The LLC costs $800 immediately and then $300/yr after that.

At the risk of doing math in public, it appears my ROI is 13% this year (based on assuming rental income if 11 out of 12 months) and then over 16% in subsequent years.

From looking at the market, I'm guessing ARV is around $75k-$80k.

What numbers do you folks come up with?     Am I looking at this totally wrong?

My budget on this rehab got blown by the electrical work so I'm trying to save money.     It appears I can install curtain rods with finials throughout the house for less than $100.      Budget mini blinds are far more expensive than that.       The closet bifold doors were destroyed so I removed them completely and now have open closets in the bedrooms.    This is the first time I've tried this style.       Guess I'll see how the showings go.     

I was thinking the curtain rods would look more high end. This is a budget rental (2/1) SFH but I scored an entire kitchen including 3cm granite countertops for $650 so I'm trying to tie the decor together.

Have any of you ever installed curtain rods without curtains in a rental house in lieu of blinds?     Seems a lot cheaper and less chance of breakage.      

Hey folks,

Just settled in on the Chain O' Lakes last summer and looking to start flipping and/or BRR. I'm a fairly conservative investor (I like index funds) and have a well paying job that allows me about half the month to dedicate to real estate investing. Any tips on how to find properties outside of Zillow/Redfin/etc.? I have a core group of close friends that are GCs, fabricators, etc. so I have a great knowledge pool to fall back on. I already have one foreclosure remodel under my belt that yielded a nice profit and am working on a BRRR as we speak. I'm only interested in propties that are close by my home as I'm trying to build up a small (10?) amount of SFH rentals. I'm pretty handy as well I do most of the rehab myself unless it's cheaper/faster to hire subs. I've been reading through this website for about a month now have found some great advice.

I'm new to the area but I currently have a 1/1 rented and am rehabbing a 2/1 SFH for a future rental. I'm focused on Antioch as that's where I live.