All Forum Posts by: Tim Herman

Not enough information. Most investors look for cash flow. There are spreadsheets in the files section that can help analyze. You can use the BP calculators for free for 5 uses. Need tax info, insurance, vacancy, repairs, capex, interest rate, arv.

@Hariharan Elavarasan it can be in certain areas. if you are in rent control then it will be capped by whatever the local area allows. Just be prepared for vacancies, a tenant paying 550 and going to pay 950 is an 80% increase. Be prepared to upgrade the apartments to get the full increase. 

report can't be opened

@Sam D. you can get an investor friendly, attorney state approved lease package by being a pro member. Be under Tools, lease agreement packages. You can have a local attorney review if you have questions about the lease. This is one of the perks of being a pro member.

@Mike Bonomo I think it is time for a new property manager. From my quick search. A process server does not have to serve the tenant but can post in a conspicuous place at the rental, ie front door. Contact an eviction attorney asap and get this tenant out. The tenant should have been evicted by now. it would have been cheaper to contact an attorney right away rather than postponing the eviction for 5 months. NY is a tenant friendly state and it might take you 3 months more to get them out.

@Evy Grace Do you have real estate brokers license? Most states you need to be licensed or be a paid employee of the owner to rent properties.

@Dennis Kepcha Are you using cash for your rehab. That is the calculation you put in the calculator. No PMI listed on low down payment. Once you refinance you will have to bring another 67k to the closing table to pay off the first mortgage. Unlikely you will only pay 6% management. With rent up fees it will be more like 10-12%. Can't tell you if your repair and capex budgets are accurate. Percentages are okay for a rough estimate but a comprehensive budget would give more accurate numbers. You might want to up your property tax estimate. Cook county average is 2.09%. 625k*.0209=$13063.

@Mason Wyatt Hughes Do you have another spreadsheet to link to this one showing how you arrived at 5% repair budget. Do you have another spreadsheet linked to the capex budget. I don't see that listed. It is a variable cost that has to be budgeted. Whenever you use percentages it can be skewed either high or low. Sub $1000 properties usually don't save enough for capex and repairs.  Here would be a simple repair budget. A 5% vacancy is the equivalent of 20 months before a vacancy. 5/100=1/20. Using that as the timeline for turnover. What is it going to cost you to repaint and deep clean between tenants. Assume $1500. How many service calls. Assume 1 per year or in this case 1.5. My average is $150, so $225. $1750/20 months timeline= $87.50 per month.  

@Nate Huber Have you run capex and repair budgets? Percentages are okay for a quick guestimate. This would be a simple repair budget. Cost to rehab upon turnover+ the number of repairs per timeline. using your 6.2% vacancy, you are facing a turnover every 16 months. What is your cost to rehab? new paint and deep clean. Depends on the size. Let's assume $2500. How many service calls. I average about 1 per year. (leaky faucet, toilet clogged, garage door not working, etc). Average $150 per call. So 1.5*$150=$225. $2725/16 months turnover=$170 per month. Can mitigate the cost by touching up between tenants and repaint every 3-5 years.

Here is 1 item in a capex budget. Floors. Go to your favorite flooring store and ask about the commercial warranty. 10 years or less(carpet 5 years). Assume 2000 sf of flooring. My area it cost me around $6 sf. $12000/120 months lifespan=$100 per month for 1 item in a capex budget. Still have to save for roof, hvac, appliances, hot water heater, bath and kitchen remodel, exterior paint, driveways, etc. 

@Ty’Quan Airline Don't have enough money for closing costs. No dp need 20-25%. Interest will amortize over 20-25 years variable. Absurdly low taxes. More like $1200-1500 per month. Not enough info to see if your variable costs make sense. Have you run repair and capex budgets? Vacancy of 3% is your tenant staying for 33 1/3 months. Banks will underwrite at 5%. No utilities or grounds keeping.