All Forum Posts by: Tim Herman

@Nick Schlag you use budgets or have cash on hand equal to  1 1/2 times the most expensive capex item. Whenever you use anything out of the budget you suspend taking cash out and replenish the budget.

@Ed W. @Ben Layman I'm bad I used Richmond Va taxes. I would go with the expert on local taxes. That high of property tax is going to make this very close to even on cash flow.

@Ben Layman your property tax is extremely low. Googled property tax and it is 1.2% of arv. Thats $300 per month not $112. With permits pulled most likely will get reassessed the next year. Be prepared. Do you have a quote for insurance. Seems cheap for a duplex, less than $40 per unit. I believe Freddie Mac you have to have 12 months of seasoning before refi. If the bank keeps it in their portfolio you can get by with 6 month seasoning.

@Agustin Conti Capex is capital expenditures. It is parts of a property that wears out. Roof, floors, pipes, hvac, appliances, hot water heater, driveways, etc. All of these items have a limited lifespan. That is why you get to depreciate the property and why reserves are necessary to replace the parts that wear out.

@Agustin Conti Why do you think you have a case? Most failures of cast iron pipe will be considered capex. Maybe some of the damages from the leaking pipe might be covered.

@Joe Maris It is in the files section of BP. Bottom of the page you will see explore. then go to the files section. It will be first page as a popular download.

@Alla Koretsky What happens when you evict and it takes you 3 months to get them out. 3% vacancy is your tenant staying 33 1/3 months, so your next tenant has to stay 100 months without a turnover. Did you do capex and maintenance budgets to get $102 expense per month. Hard to give more advice when there is no description. SFH or multi. 1 bedroom or 5 bedroom. 500 sf or 13000 sf. No PM expenses All utilities separated.

@Evelyn J Good There would be no sublease with you. Straight up lease with you, excepting the property in the garage. I assume you want to rent out higher than what you are paying then add that you have the ability to sublease. 

@Evelyn J Good why don't you use a regular lease. The lease you sign with the landlord allows sub leasing so you control the property. A property manager doesn't use a different lease. Why make it more complicated.

@Jarret Durst Run a budget. What is it going to cost you to rehab the unit between tenants and how many repairs are needed over a timespan. Your 5% vacancy is the equivalent of a tenant staying 20 months. Let's assume it costs $1500 to paint and deep clean between tenants. Assume you average 1 repair per year(mine average $150 per service call). So 1 1/2 service calls per 20 months=$225. $1725/20 months=$86.25 per month per unit. Did you do a capex budget and it showed $240 per month? Insurance seems low for 2 units. Flood insurance is expensive. Are the utilities separated?