All Forum Posts by: Tim Herman

@Tomasz Wojcik I think you need more understanding of the numbers. Under the education tab there are plenty of options. You do not have any vacancy, no capex(capital expenditures), no PM. Taxes are low. Average in the USA is around 1% of ARV, so around $300 per month. Insurance seems to be problematic in certain areas of FL for wind. I don't know if it is in your case. Seller will not carry at 0% interest for 20 years. IRS will force him to pay a certain % on the balance. Are all the utilities separated. Who pays for yard chores. You go down and look under the 50% tab and it shows you will lose almost $200 per month cash flow. Won't find an investor for a deal like this to share equity.

@Estefania Navas won't get a loan without insurance. Only putting 5% down. Most likely will be paying pmi unless a hml. Hml have interest only loans not usually amortized over 12 years.. 100k rehab that generates almost 200k of profits is very optimistic. You have the100k to put in repairs. Taxes will go up on that extensive of rehab. You should be able to refi 70% ltv or 322k. Don't have a crystal ball to know what interests rates will be in a year.

@JJ Williams how did you find the only indestructible house in the world. You ran a maintenance and capex budgets and they came to $0 per month. My Ltr I figure a minimum of $50 per month per unit. Yours might be higher as furniture will wear out and need to be replaced. All your capex has to be accounted for:roof, floors, appliances, hot water heaters, hvac, bath abd kitchen remodel, etc. 

@Michael Familia I don't like using percentages except for rough analysis. I am a conservative investor

I use 8% vacancy, 5% repairs and 10% capex for rough analysis and 10% PM. To get more accurate numbers you have to do maintenance and capex budgets. You need to determine if the taxes rise upon purchase. In the US average tax rate is 1% of arv. 

@Michael Familia where did you discover the only unicorn that has no vacancy,no repairs,no capex , and doesn't need a property manager. You will be somewhere between making a little money and losing money as shown in the 50% rule. It shows you losing around $700 per month. Taxes seem low.

@Christian Santillan If you are a flipper you should know the cost of building. Manufactured homes run over a $100 per sf. They have economy of scale. Certain areas you can buy at less than the cost of rebuilding. There used to be tons of houses in Detroit that you could buy for pennies on the dollar to construct. Call some local contractors and get some rough ideas.

@Christian Santillan My area it is around $145 per sf plus lot for sfh. the sf price for units will be higher since you will kitchens and bathrooms in each unit. You will save some costs by only having 1 roof. I think your goal of 25k per unit is unrealistic. Maybe 100k per unit

@Justin Dighans what does the landlord tenant laws of MT say. My quick google search shows that a 30 day notice is sufficient for an increase for rent. If they don't agree, let them know that this a notice of nonrenewal. Give them a limited amount of time to sign the new lease.

@Robert Gibbs Did you get an insurance quote. That is only $35 per unit. Have you run  maintenance and capex budgets. Here is a simple maintenance budget. Cost of turnover, (not vacancy) + the number of repairs. I usually average 1 per year. Your vacancy is the equivalent of 1 turnover per 20 months. Using 20 months as the timeline you would have 1.5 repair calls. Mine average around $150. So $225. Can you repaint and clean each unit for $1500. Total cost is $1500+$225=$1750/20 months= $87.50 per month per unit. A capex budget is done the same way. Let's assume you have 2000 sf of flooring. My area it is $6 sf to replace. Go to your favorite flooring store and ask for the commercial warranty. Most will be 10 years or less. $12000 flooring cost /120 months lifespan=$100 per month for 1 item in a capex budget. You have $30 per month to pay for roof, appliances, hvac, hot water heater, bath and kitchen remodels, etc.  Your capex budget is probably half of what you need.