All Forum Posts by: Timothee Brzozowski

@Jason McKee talk to @Scott Henrikson

@Huan Nguyen

I forgot to include higher insurance and I’m managing and maintaining the property for now so low expenses and tenant pays all utilities.

I recently found a property with my partner. It looks good but I’m wondering what you guys think about it. Don’t take it easy on me. Be honest and blunt.

** Property Description **

Address: Rapid City, SD

Type: House

Beds/Baths: 3/

Square Footage: 1,104

Year Built: 1953

Lot Size: 6,969 sq.ft.

** Purchase & Rehab **

Purchase Price: $117,000 ($106/sq.ft.)

After Repair Value: $165,000

Purchase Costs: $585

Rehab Costs: $11,286 (75% Financed)

Down Payment: $32,072

Total Cash Needed: $32,657

** Financing (Purchase) **

Loan Type: Amortizing

Loan Amount: $96,215

Loan to Cost (LTC): 75%

Loan to Value (LTV): 58.3%

Loan Term: 30 Years

Interest Rate: 5%

Monthly Payment: $517

** Holding Costs **

Holding Period: 2 Months

Loan Payments: $1,033

Recurring Costs: $414

Total Holding Costs: $1,447 ($724/month)

** Refinance **

Refinance Loan Amount: $123,750

Refinance Costs: -$4,950

Purchase Loan Repayment: -$95,983

Holding Costs: -$1,447

Refinance Cash Out: $21,370

Invested Cash: $32,657

Refinance Cash Out: -$21,370

Total Cash Invested: $11,286

** Financing (Refinance) **

Loan Type: Amortizing

Loan Amount: $123,750

Loan to Value (LTV): 75%

Loan Term: 30 Years

Interest Rate: 4%

Monthly Payment: $591

** Cash Flow (Monthly) **

Rent: $1,200

Other Income: $75

Vacancy: -$60 (5%)

Expenses: -$255 (21%)

NOI: $960

Loan Payments: -$591

Cash Flow: $369

** Returns & Ratios (Year 1) **

Cap Rate (Purchase Price): 9.8%

Cap Rate (Market Value): 7%

Cash on Cash Return: 39.3%

Return on Equity: 9.2%

Return on Investment: 277.6%

Internal Rate of Return: 277.6%

Rent to Value: 1%

Gross Rent Multiplier: 8.13

Equity Multiple: 3.78

Break Even Ratio: 70.5%

Debt Coverage Ratio: 1.62

Debt Yield: 9.3%

@Steve K. I sure do love empanadas though! Thanks for the tips! I didn’t think about clearing out the drains, disposal, and p trap.

It seems to be just a certain type of cooking/cuisine that causes this (with as much emphasis on being as sensitive to other cultures as possible) We actually dug into it a bit more today and it seems as though the microwave (above the stove doubling as the hood without an outdoor vent) is holding on to some serious grease/dust that is undoubtedly a large portion of the concern. I will be replacing it with another one to see what that might do for the odor!

I'll be giving an update after that is completed and see if the smell dissipates. 

Thanks all! I’ll keep trying trial and error.

@Aaron K. If you remember what that is you’d be a life saver, I’ll do some digging and see if I find something!

@Steve K. We have even done that! It’s just sometimes it comes back. Pretty frustrating.

Obviously we have all dealt with certain types of food odors in properties before. Mostly we tend to have an odor additive to our paint when we paint and try to clean the kitchen appliances and scrub all the cabinets and so on. What have you come up with or is there a good way to get it out to be able to cut down on turn time and vacancy periods?

@Nik Corbaxhi, I think that is what I may end up doing, hopefully I can find something to cashflow with and get my feet off the ground to gain some capital for further investing this area and others I have been watching.

Confidence is something I have, I just get into grooves where I have a little bit of a low risk tolerance.

Thank you for your insights and advice!