All Forum Posts by: Tim Herman

@Ty Zaczkowski Just call Tim Perkins at Premium Property Management in Jamestown.  Why do an ad when you can ask someone that does it as a business. I just assumed it was Jamestown  as Valley is only 8500 people. I live in the country near Jamestown.

@Jesse Scroggins Why are you doing this as a portfolio and not individual owner carry mortgages. That way you can sell one and he can get a lump sum and your payment drop. If he wants all his money in 15 years tell him you will amortize the payments over 30 and a balloon in 15. Portfolio note @ 30 years mortgage drops to 2062 per month, ballon of $229000 year 15.

@Raymond N. Like  @Chase Louderback said it is all a numbers game. Your rich uncle just died and gifted you the property. You say I am not going to take it because it has oil heat. Numbers,numbers,numbers. If the numbers work it doesn't matter what the heat source. Worried about how old increase your CAPEX. I wonder how the people in Europe cope with 700 year old homes?

@Yulyana Karpava  There is a possibility of a recession, no doubt about it. If there is a recession the stock market is going to tank.  Let's play the game. The great depression lasted 10 years. Using the same numbers 10 year no growth rent decrease 10% or $100. Cash flow neutral. $37000 mortgage paydown- $9000 selling cost= $27000 cash in year 10. Invest $20000 in stock market lose 30%= $14000. Look at B areas wherever you decide to invest. A areas will be hit the hardest and the most rent decrease. I didn't lower my rents during the downturn in CA in 2008. I keep mine slightly under market. From what I read B areas only went down 10%. Tax benefit to having real estate, to shelter your other income. If you like Florida invest there, you can write off part of your trip to invest there. Income plays are in the Midwest: Indianapolis, Columbus, KC,Detroit, Cleveland. I am going to look in Ohio.

@Raymond N. Even if you are going to house hack you are not going to be living there forever. It needs to cash flow after you move to your next property. For me if it doesn't meet the 1% rule i don't bother. i'll use an example. each side of duplex rents $600. Principal and interest on $180000 mortgage is $966. You talk to your wife. Look Honey our costs for our apartment are only $366, we better buy today. Oh oh owner pays utilities $500 a month. Insurance $100 a month. taxes $200 a month. Darn renter stopped paying $600 a month. Have to file an eviction $500.  You can see you have to account for all these costs. When I ran the numbers on the calculator the  property would need to be rented at $1000 per side to show a $50 positive cash flow with 5% down.

@Raymond N. it is a numbers game. Income and expenses. Does it cash flow. The 1% rule the rent should be $1890 per month, if not skip. There is a calculator on the site you can use up to 5 times or turn pro and have unlimited use. You can set up a spreadsheet and do the same as the calculator. Until the numbers look good you don't need to even look at the property.

@Yulyana Karpava Why a condo, you have no control of the association and the fees they charge. A single family home or 1-4 units you have more control. I have property in 4 states. You develop a list of handymen, plumbers, electricians, etc. You can manage from anywhere. Real estate is about leverage and mortgage paydown. $20000 down $80000 mortgage. Year 10 house worth $150000 (less than 5% compounded) mortgage now $63000= $87000 equity. No rent increase $1200 a year x 10= $12000. Not all gravy you don't capture until you sell 9%=$13500. $99000-$13500= $85500. To get the same return you would have to get 15% compounded annually. 

@Seth Terramane A lot going on here. Can it be a legal triplex? BRRR is for undervalued properties. 525000 ARV x .7 - estimated repairs= offering price= $332500. You can house hack by living in one of the units for a year and moving again and do it over again. Your lender should tell you how much you can use as income. My understanding it is the current rent x 70%. I like to evaluate the property as fully rented. Utilities seem low, no yard care low CAPEX. Have 2 roofs @ $10000 a piece, almost 100 months before you can replace them.

@Bobby Shell Hypothetical $100000 to invest Buy 3 rentals with $30000 down or 5 rentals @ $20000. rent income $ 1000 expenses 50%= $500 to cover debt service. 30% down = $330 payment. 20% down=$380. 30% nets $170 per month x 3=$510. 20% nets $120x 5=$600 about a wash. Year 2 rent increase 5% = $50 a month. extra $100 per month for the 5.  Every year you increase rents the greater the more units cash flow. Appreciation year 10 each worth $150000.  20% down mortgage payoff $63000. 30% down mortgage payoff $55000. 20% down $150000-$63000= $87000x 5=$435000 net. 30% down $150000-$55000=$95000x3= $285000. Leverage is your friend.

@Account Closed you need to know your local landlord tenant laws. You can get a state specific lease here on the files section. You have to a criteria for your tenants. Are going to rent to tenants that have evicted? What credit score needed? Allowing pets? 3x income to qualify? Will you accept a cosigner? Deposit amount? Are you having an open house to show or individual showings? Who is paying for the background check? I recommend the tenant you pick pays but some locals that is illegal. You should have this done before posting on Zillow.