All Forum Posts by: Tim Herman

@David Taylor depends on your goals. I have some property in California that is an appreciation play. You can control rent but cannot control appreciation. The population of Winona dropped 2% not a growth market. What happens if Fastenal pulls out and takes it 1400 jobs? Appreciation is nice but cash flow is king. Equity is only money when you take it out of your property. I had property in CA that went up to $250000 during the boom then went to $100000 during the bust but it continued to cash flow. look at your equity of $40000. To get it you will have to sell the property at a cost of around 9% or $28800 so in terms of real money it is less than $12000.

@David Taylor you have a loan for purchasing for $270000. You are going to refi and get a new loan for $250000. The original mortgage has to be paid off so you will have bring an additional $20000 to the closing plus fees with the new loan. This is not a great deal less than $100 a door. This might be all right for a house hack if it lowers your current living expenses.  It does not meet the 1% rule. $2750/285000=.964%.

@Kayla Hawkins go to Meetup.com. Under career and business there over 600 events within 50 miles of Bealeton Virginia. A lot of them are free. Good luck.

@David Taylor your example ARV $224000-$40000= $184000 mortgage. $224000 times 70%= $156800. Your current mortgage is higher than what you can refinance so you cannot pull any money out. $224000-$100000 =$124000 mortgage. You can refinance a new loan for $156800-$124000= $32800 cash in pocket. Looks like you are going to live there as your down payment is so low as investors have to put 20% down. Estimate your loan interest will be higher as there will be PMI.

@David Taylor on an investment property you can pull out 70% ARV so $224 000. With your rehab budget of $30000 you can only offer $194000 for the property to do the BRRR.

@TamaraFaye Smith the app does not have tools section. Go onto the web site go to tools then files then contracts then search for options.

@TamaraFaye Smith there is one located in the file section that you can download. I would recommend you have it looked over by an attorney in your area.

@Chrissy Disch Are you looking at cash flow, equity or appreciation?  The perfect scenario would be all three. For cash flow, get the current rents and expenses and use the calculator here under the tools section or use the 1% rule. $1700 rent = purchase price $170000 less improvements needed. Until you have the cash flow you want there is no need to go further.  

@Alexander Phippen CAPEX too low replacing a roof example $5000/40=125 months. Oops have galvanized pipes and they all rusted out $8000/40=200 months of CAPEX. Low income properties have to have a higher percentage taken out to cover replacing items. Vacancy is another problem in small communities. Where I live in North Dakota some properties can sit vacant for 6 months. A declining population area. I don't want to discourage you but make sure you know your numbers.

@Sara Taslitt insurance look at zillow it will show you a projected cost. A lot of times the economic development department will have the vacancies also check with property managers. Closing cost are based on the cost of the mortgage and escrow for taxes and insurance. I usually use $3500 as an estimate. The title company will give a better estimate. PMI is only for loans under 20% and is usually a percent between .3 to 1.2% of the loan balance per year. Repair cost can only be estimated by a contractor or your own knowledge through experience. CAPEX or capital costs: roof, HVAC, plumbing,wiring, septic depends on how old. Roof that is 15 years old with a 20 year life span will have to recoup the costs in 5 years. Low dollar rentals have to have higher CAPEX to build a reserve. Maintenance is around 3 to 5% per year. Future assumptions: WAG wild *** guess. I use 2% across the board.