All Forum Posts by: Tim Herman

@Dan Gibson You haven't used any financing. If you borrow on the HELOC I assume you want the rental to pay it. Your Capex and repair budget is $170 per month or $2000 per year. How old are your major components, roof,heater,etc and will this be enough to cover it. Property taxes right a $25000 property = $202 per month seems high. Other than the questions I posed it looks good.

@David Boley In my area PM for a single unit is 10%. I like 8% vacancy. Your 10% repairs and CAPEX seems a little light. I don't know the condition of your major components. Year 20 of a 25 year roof that will cost $7500. 5 years. You will only have $6000 in your CAPEX and repair budget, providing you didn't have any other expenses. I downloaded a spreadsheet that had most major components listed with their expected life spans. I have it on my computer but cannot find it on Bigger Pockets. The only other thing you could do is take all your extra cash flow put it in a reserve fund until you have around $10000, then start taking the cash flow to put towards another property.

@Damien Smith If I was starting out I would owner occupy a multifamily for 5% down and move every year for 10 years. End up with 20-40 units in 10 years with minimal down payment. Check out local banks and credit unions for the loans.

@Patrick Welteroth Craiglist and Zillow work for me. You have to have your tenant qualifications: income 3x rent. credit score 600, etc. So who has your best interest you or the previous landlord. I would rather have a vacant property than one with a tenant from hell. What if they have a long term lease $200 under market. Get over your fear of vacant properties or don;t get in the buy and hold business.

@Denep Gonzalez For quick analysis use some basic formulas. 1% and 50%. you rent your property for $1300/.01=$130000 max price of property. 50% of $1300=$650 will go to expenses in the long term (roof replacement ,carpet replacement, etc). If you take $300 per month for taxes and insurance your PI is $870. You are only losing $220 per month. For me it is a sell.

@Andreas W. My rental agreement lets me have 2 open houses before the tenant moves out. I run my background check and have minimal downtime.

@Account Closedif it is a title company they have to follow the contract or you will have to rewrite another contract. You will also get a credit for whatever the rent is collected before the close. Why have the burden of trying to collect the security deposits. This is a business treat like a business.

@Account Closed does the contract say the security deposits are to be transferred to the new owners. Have you reviewed the leases and have Estoppel letters from the tenants. Usually a standard contract will transfer the security deposits so you won't close until the owner gives you a credit or gets them back from the tenants.

@Akono Hite if you have been on the site then the 1% rule. $1000 per month rent then purchase price =$100000. If your property doesn't meet the 1% rule it will be negative cash flow. I do have some properties that are appreciation plays but if I was starting out I would make sure it cash flowed. If I was starting over I would but multifamily 2-4 units with 3-5% down and move every year for 10 years. You will end up with 20-40 cash flowing units.

@Josh Shneyderov it depends if you are in year 20 of 25 year roof, you have to have enough CAPEX to pay for the roof. $7500/5/12=$125 per month. You need to estimate where you are in the replacement cycle. One of the posts someone had a spreadsheet with the major components listed and timelines. I should have grabbed it. In my calculations I use 8% vacancy, 5% repairs and I like around $250 a month for CAPEX. Good luck