All Forum Posts by: Trevor Martin

Nevermind, I scrolled down ~10 posts on the forums and saw somebody else with the same question! Sorry guys.

Hi all,

I recently started RE investing (currently have two SFR's under my belt) and I'm still very green. I've been considering getting my real estate license just to gain a general knowledge of the field (saving or gaining money for commission on my purchases wouldn't hurt either).

I was wondering if anybody has done this? Is it very beneficial or would it be a waste of my time and money?

Thanks!

Scott,

I thought the 50% rule was more designed for multi family properties?

Deborah,

Any % of the $250/mo can be used toward maintenance. I don't know how much to set aside, but I assume that's more than enough. Especially when a lot of the big purchases (furnace, a/c, siding) are already being taken into consideration.

Also, I don't really like to factor a vacancy rate into my SFRs. There's a very high demand in my area and the turnover time is next to nothing.

Nate,

That's a good idea! I didn't think of that. You're right it would be a little tough to do that with the current cash flow.

However, I was thinking more of just adding that $9k on to the purchase price. I have the cash to do so, and even at a 72.5k "purchase price", it's still a deal compared to comps, as well as from my analysis, has a pretty good cap rate.

Thoughts?

Hi all,

I would really appreciate it if you would help me decide on whether or not this is a good buy and hold deal. I'm new to real estate investing (only last two months) and this could potentially be my second purchase, so I want to make it a good one:

3 Bedroom, 1 Bath Single Family Home
Purchase Price: $63,500 (comps sold for $80k-$90k last 9 months)
Rent: conservative $900/mo, expect it to be more around $1,050
Mortgage: $456/mo *Paying cash for now, may cash-out refi to purchase more
Insurance: $60/mo
Management: $80/mo
Taxes: $1400/yr

Necessary Rehab:
- Various electrical and other repairs: $500-$1500
- Carpeting Upstairs: $2000

Future Rehab:
- Heating and A/C Units are VERY outdated. May last a few more years, but replacement in ~5 years expected. About $5,000.
- Wood siding outdated and becoming worn. Replace w/ vinyl siding in next 5 years. About $4000.

Based off of my analysis, I see it cashflowing around $260/mo, with an instant $15,000-$20,000 equity gain at the purchase price. However, the bigger repairs in the next five years scare me.

Thoughts?

Update:

He suggested one of two options for me to get my half of the down payment back:

1) In April, when he's refinancing one of his other properties, he will be able to cut me a check for what he owes me.

2) I can wait 3-5 years until we have enough equity in our prospective purchase to refinance and purchase another property. When we refinance, I can take out my half of the down payment, + 4% interest.

Which option would you guys suggest? Obviously I will get either in writing.

Also, trying to be worse case scenario here. There's no way I will be paying the full asking price, and I believe there is room to improve the units and increase rent.

I was getting about a 9.3% cap rate. What am I missing here?

75,000 (income) x .95 (vacancy) - 18,050 (operating expenses) / 575,000 (purchase price) = 9.25%

Good morning all! Make today a productive day :)

I'm relatively new to REI and only have two single family homes under my belt at this point. I'm going to a showing for a 12-unit apartment building today, and was hoping to get some more experienced insight on whether or not I should pursue this deal:

12-unit Apt Building
Asking Price: $575,000
Yearly Income (rent): $75,000

Expenses:
Insurance: $2,250
Taxes: $7,800
Utilities: $2,000
Management: $6000 (8%)

Is there anything else I need to take into consideration? As I said, I'm a newbie, and this is my first time dabbling in anything but SFRs.

Thanks!