All Forum Posts by: Brian Campbell

I think I wasn't clear. Not sure how to get my point across though.

When assessing market value of a property your evaluating, does anyone factor in the cost of replacement. What it would cost to build the same or like house today. Certainly that has validity as no one would pay more than building a brand new one would cost right? And that would then be its true market value. Of course your new one is a better home simply because its new.

I've read somewhere that true market value is what it would cost to build (replace) the house your looking at.

How realistic is this? If this is so, wouldn't you look at the value of the improvements only when pricing out the cost of replacement since you can't include the value of the land in this equation?

If this is indeed the true value, how should I go about pricing out what it would cost to replace it? Is it worth the time?

I think I am familiar with market values for my area in regards to what I am looking at, but with such fluctuation and bidding wars going on I think it prudent and frankly interesting to pursue this question.

well, more evidence over the weekend suggests rents are stable and homes are being bought. I ran into many buyers on Saturday and the homes are all becoming bidding wars. I think the August numbers suggested an 18% increase in home sales.

Perhaps the point is moot and things are turning around.

The next question would then be, what will the pace of short sales and foreclosures be in the months ahead?

Connie, I meant that homes that were sold for 350k (and are now going for 120k) are renting for 1250-1400 (to be more accurate). However, when homes were 350K they were renting for only 100 dollars more. I'm basing this on only two rentals I knew of, but I think its true of my area.

so should I just write up the partnership aggreements myself or hire a lawyer to do so for me?

The partnership is 50/50. I need them for their money and maintenance ability (they will take care of all maintenance) and one is a realator so commissions go back into the company. I am finding the deals and property management.

I've read every thread in here on LLC's vs umbrella liability insurance. My lawyer (a friend) will set up my LLC, but it will cost over 1K to do so so I am looking for other options.

My longterm girlfriend (12 yrs) and I are going to partner with her brother and sister in law in buying rentals. My girlfriend is buying the first house and they will buy the second. I am worried about the tax implications not being fairly distributed without an LLC.

Can the profits and losses be distributed somehow without a partnership. We might be buying a house very soon (have an offer in) and I am still not sure how to approach this problem. I think eventually we will set up a LLC, but for now how do I solve the tax problem? How would you do this?

are they based on the sale price of the house or the market value?

my area is flooded with foreclosures as well. But my point is, isn't it prudent to account for the fact that these homes will be bought up at some point and rents will then decrease. So should I account for that when figuring the numbers?

I get supply and demand. The supply is going to be high once prices bottom out everywhere won't it? Investors will be scooping them up as well as first time buyers and those that waited on the sidlines while others were getting raped.

The question is? Are you factoring in today's rent when looking at the numbers? Or are you speculating they will drop? I guess I am only asking those in areas of high foreclosures.

isn't it safe to assume while putting deals together for buy and hold that rents will decrease from current highs. In my area rents are 1250 for 3bd/2bth, which was acceptable when homes were 350K, but with homes now at 100k those rents will be 1.25 % of market value and with homes expected to drop (and in some cases already have) to 80K current rents would be 1.5 %.

In my recent readings, rents should be about .8 % of market value. When figuring rent comps today, shouldn't we be figuring the adjustments going on right now?

My other thought was; people have been paying this for years and can still afford it, wages aren't going down (although unemployment is rising), so perhaps they are stable.

Then again, new investors will be buying cheaper and undercutting current rent prices (or will they) driving down the rent. I can't figure this one out and need some expert advice from those that have been doing this a long time.

im new and have nothing to offer strategy wise, but I just wanted to add that if you think 20-25% is a big slide my area has hundreds of homes that or 50-75% off their highs.

My strategy is learn as much as I can and strike when the market begins to turn around. Its conservative, but I have a steady job and some cash. I will wait until the cash can buy a bit more.

I am well into old threads on the topic. I don't wan't everyone to rehash the topic here as it seems to stir everyones blood. To sum up what I have read and what I bought into; The 50% rule is a good rule of thumb for a beginner investor. But naturally many factors could make this rule more effective or less.

As a beginner who has a full time job already and not the kind of time or experience to find homes 30% under market value without a lot of luck, I will adhere to the 50% rule and be looking for at least $100 cash flow. I expect to learn more as my portfolio grows and perhaps gain enough confidence to stray from the rigidness of that rule. But for now i see it as minimizing risk.