All Forum Posts by: Tim Herman

@Joshua Kim reid in the line where purchaser is: Joshua Kim reid and/or assigns. If the seller signs the contract he agrees that the contract can be assigned.

@Les Richardson Where have you discovered the only rental that never has a vacancy? Banks will underwrite at 5% vacancy. Have you verified you can get a loan for less than 50k. Have you done repair and capex budgets, they seem a little low. Sub $1000 per month rentals need higher percentage of rents to cover future costs.

@Juan Ledesma You expect interest rates to be 0% in a year. I would figure minimum at 7%. At 7% your payment will be $4657.12. That extensive of a renovation property tax will increase. Be closer to $850 per month. Without more info can't tell if your variable costs make sense. Won't get a loan without insurance. Even paying cash for the house and rehab it is a good idea to have insurance. If you have a fire or someone gets hurt you will be liable.

@Chad Robertson a few details missing. Number of units. Size of the structures. In a Hoa, does it allow rentals. What does it cover. Reserves in the Hoa. Unlikely management will be 8% with the rent up fees.

@Nadera Daqiq You don't need a mentor to analyze deals. You can post your numbers in the forums and people will critique them. Since you are not a pro member, you can only use the calculators 5 times. You can find spreadsheets in the files section to help you analyze properties. The hard part is how to arrive at the numbers. Most of the spreadsheets and calculators use a percentage and that is good for overview but better numbers make better decisions. If you are looking at BRRR then you will have to pay a contractor to walk the property to give an estimate of the rehab.

@Max Hutchinson it is your asset and you have every right to protect your asset. Most rental leases have the ability to enter the property without giving notice in an emergency. If you want you could give a 24 hour notice to inspect the property and look at the heat settings.

@Ramon Almonte unlikely you are using the correct numbers as you are just using a percentage. You need to do a budget for capex and repairs. Taxes may go up on a purchase to reflect the new arv.  Here is a simple repair budget. Cost to rehab on turnover + the cost of repairs over a certain timeline. If we use 5% vacancy that is 20  month average. I figure 1 repair per year so 1.5 for 20 months. My average cost is $150 so for the 20 months $225. What will it cost you to do a turnover. Since you didn't specify the size of the 1 bedrooms I will use $1000 for cleaning and repainting. $1250/20 months =$62.50 per unit per month for the 1 bedroom and more for the 2 bedroom. The 3 1 bedroom units already exceed your budget. I missed the dp is less than 20% so you will have pmi added to the mortgage. To do a capex budget is the same. Find the lifespan of the major components of a house and add up how much monthly you need to save. If you have a 100 cash flowing units you won't have to have a reserve.

Meetup.com input zip or town and distance willing to travel.

@Ramon Almonte hard to analyze without more info. How many units? Size of the units. How long can you sustain 2k negative cash flow?  How did you arrive at 2% vacancy? That is the equivalent of your tenant staying an average of 50 months. What happens if it takes you 3 months to get them out or another pandemic. Your next tenant will have to stay 150 months to get back to the 2% you factored. That is almost 13 years with no turnover. Banks underwrite at 5% and I use 8%. With rentup fees your PM will most likely be 10-12%.