All Forum Posts by: Tim Herman

@Julian Marmelo need more info. How many units. size. Taxes seem low. Don't think the water and sewer company will pay you a dollar for their service. No pm. Have you run capex and repair budgets? Any common area where the landlord provides the utilities. Any grounds keeping. If you look at the 50% rule it shows you losing around $250 per month.

@Marc Stevenson use the network tab on BP and select meetup in the location you want. You can also go to Meetup.com select real estate, location , online or in person and number of miles willing to travel. On meetup.com looked like plenty to pick from.

@Jennifer Blanchard i am a conservative investor so I analyze at 8% or 1 vacancy per year. I only do a major paint every 3 to 5 years but if I have turnover before that time I do touchups and cleaning on the turnovers.

@Jennifer Blanchard You need to learn to tag people. Use the @ sign and start typing their name. It will appear. click on it and it fills the comment box and they are notified, especially if you have additional questions or need clarification. If the post provides valuable information you can vote for it. 

@Jennifer Blanchard I run budgets for my variable expenses. A simple repair budget is the cost to rehab + the cost of repairs over a specific time. In your analysis you are using 5% vacancy which is the equivalent of your tenant staying 20 months. 5/100=1/20. You find out what it will cost you to repaint and deep clean between tenants plus the number of repairs( i use 1 per year or in this case 1 1/2) It usually averages $150 per. Assume the cost to deep clean and repaint is $2000 plus 1.5*$150=$225= $2225/20 months= $111 per month per unit. A capex budget is done the same way. You get the lifespan and calculate how much you need to save for each item. ARV usually needs MLS access (zillow lists some)and in a declining market only sold comps in the last 30 days would be appropriate. Rehab costs are hard to estimate until you do enough. Pay a contractor to walk a property and get a better estimate. A cosmetic rehab is a little easier. Contact various trades and see what their costs. Call a painting contractor and ask what they charge per sq ft. Call flooring contractors and do the same thing. Eventually you will know what it costs in your area. When you make structural changes that is going to have a professional opionion.

@Chad Robertson Have you run capex and repair budgets? The size of the property will impact both budgets. For sub $1000 per month rentals the percentage used needs to be higher to have enough reserves. Unlikely the electric and gas companies will pay you $37 and $44 per month to use their services. Vacancy of 5% is the same as your tenant staying an average of 20 months. I analyze at 8% or 1 turnover per year. Even if you are self managing it is wise to add PM services. 

@Wendy S. My interpretation is the late fee cannot be imposed until 24 hours after the due date. So no late fee until the second after 3 pm. You can pay for a lawyer and see what they say. Like @Nathan Gesner I use a one time fee. If you are confused about your interpretation of the late fee how are you going to justify it in front of a judge. Simpler is better.

@Gabriel Sanabria they are afraid the property will not appraise. Usually that is one of the reasons you can get your emd back. If it appraises for 350k and your offer is 400k you would need to bring an additional 50k to the closing table.

@Donovan Swain Have you found the only rental that will never be vacant and never need repairs or capex? All those are costs that need to be figured. No insurance. Ignoring cost makes this look like a better deal than it is.

@Jennifer Blanchard How did you arrive at capex and repair budget? Did you do an analysis of each? Hard to tell if this a sfh or a multi. Looks like the taxes are low. Googling property tax if looks like it should be close to 1% of PP. Insurance looks high for a rental but I know FL has higher insurance cost for wind and flooding. Are their any landlord expenses like yard or common utilities. Better numbers give better results.