All Forum Posts by: Tim Herman

@Nathan Killebrew Use the calculators. i bought my first house by getting a signature loan at the bank (18%)  to assume the loans on the place. Cash flow negative $50 per month plus paying on sig loan. Put a tenant and 8 months later had to evict. Didn't screen correctly. After he left, found out he rebuilt his Harley in the living room. Got lucky the carpets cleaned up but had to repaint everything. First few years had to pull money out of my pocket to operate the rental. The calculators are your friends.

@Michinori Kaneko if you want anyone  to know that you replied you have to type the @ sign and start typing the name you want to reply. It will drop to the left of the comment box. double click and it populates the comment box with the name in blue. Then they are notified you responded. Are you the buyer or seller in these hypotheticals.

@Dallas Thomson welcome to the forums. small multi families are priced similar to house of the same square footage. REIkit.com has a free ARV tool. Play around with it. I don't want to be negative but a cash flowing multifamily will be hard to BRRR. ARV*75%- fixup cost= Purchase price. If i was starting over I would buy a small multifamily with under market rents and house hack with 5% down. Live in one and rent the other, Move every year for 10 years. Will have 20-40 doors in year 10.

@Account Closed most newbies underestimate expenses. Rule of thumb 50% of rental income is expenses. Long term mine vary from 43 to 55%.  $1200 rent = $600 for profit and  mortgage servicing. $106000@ 5%= $569 PI. $31 cash flow per month.

@Nicole Kittell Down payment will be 20% nonowner occupied. Vacancy looks right. Your repair and capex looks light. If you are in year 15 of 25 year roof you have to have enough in budget to pay or write a check out of pocket. I don't see any budget for cleaning for common areas or snow shoveling or ground maintenance.

@Diego Hernandez any title company can run a preliminary title report. It might cost $100 but it is better than making a big mistake. i went to a seminar and I think that the IRS lien is wiped out but they have 120 days to redeem and pay the first mortgager. Good luck.

@Diego Hernandez title search. First position will wipe most other liens. tax liens may wipe out first position. 

@Seth Hudson I've had sellers tell me it is a 10 cap but they don't include all there cost like they leave out repairs,vacancy or lawn mowing. Then I ask if will sell me the property at a 10 cap after I deduct these other expenses. So far they have decline. Trust but verify.

@Michinori Kaneko land contract is like a car loan. Bank holds legal title and you have equitable title. Same as a land contract. Seller has legal title and buyer has equitable title. If the buyer doesn't make payments the seller will have to foreclose. Lease options that credit money to purchase price might be considered land contract and you would have foreclose rather than evict the tenant. Other people have more knowledge about Lease options.

@Dom Barlow Quick analysis. 1% rule monthly rent divided by .01= maximum purchase price. $900 rental income/.01= $90000 purchase price. Unless they will sell it for that price it is a pass.