All Forum Posts by: Tom Weyer

Definitely interested. Let me know if I can help, too. 

Joe: 

Interesting. Could you tell me more about your modified Turnkey program? Do you mean you have someone who shares in the profits in the OOS properties area?

So if I were to find a deal, obtain financing and close, I would have another investor there to deal with the property manager and contractors etc. for repairs, maintenance and capex? 

Is this a common way to go about it?

Emily: 

Thanks for the encouragement. Yes, Long Island is a bit harsh and I do think I'd be able to start off better out of state. I will definitely do my due diligence. 

I live on Long Island in NY and am just now trying to start out investing. I do not have lots of cash at all and it seems like most deals I analyze around me are not close to a positive cash flow. Not to mention that houses are super expensive here.

After just a little bit of time looking at properties for sale in Pittsburgh, I was able to find some deals that I believe would have good cash flow (I would obviously have to do more extensive research and come up with more accurate rent and other estimates for my analysis, but the deals seem much more feasible) and they are at asking prices low enough that I would not have to save money a year and a half just to come up with a down payment.

Do you think it would be worth it to start my REI endeavors out-of-state (even if it is not Pittsburgh)? I have not started to build my real estate network yet, so I don't know much about dealing with property management companies or agents (except the one I dealt with buying my primary residence).

If I were to go this route (Buying rentals out-of-state), could you guys give me a few tips/things to consider or even next course of action for me? I would definitely use a property management company as I want to put as little time as possible into actually managing my rentals.

Thanks a ton in advance!

 No class.  Just trolling the BP forums and making my own spreadsheet for the analyses.

Yup; and I guess it really is your cash anyway. Just tied up in another rental. Thanks!

Ah, that's not great news but that is the reason I'm practicing. I will look into investment financing terms. For now, to mess around with more, what is a reasonable ballpark down payment to assume?

Also, Is this still the case if I were to live in one of the units? 

And good point; I'll definitely look into vacancy rates more thoroughly. 

Thanks a ton, guys!

New to this and trying to understand. You essentially put no cash down, right? The 25% you needed in cash was just taken from equity in another property?

If that's the case, how do you really calculate a Cash on Cash return?

Thanks for the input.  Should be 5% down ($275k x 5% = $13,750) Am I missing something? I recently bought my primary residence using a traditional mortgage with 5% down.

After a grueling search for my primary residence, it looks like most home around here are going for near the asking price. I am really also most interested in the rental cash flow.

Also, this is a multi-family. Sorry, I forgot to add that info in! the rent assumption is $1,800 for each unit. It's 5 br 2 bath, but I didn't see the breakout of which unit has what; So i tried to underestimate rent. The total rent in this analysis is the $1,800 x 2 = $3,600/month or $43,200/yr.

Hey everyone. Don't have enough cash yet, so not doing the deal; but I want to keep practicing my analysis for rental properties. Could someone take a look when you get a chance and let me know what you think of this deal? I developed my own spreadsheet, so I'm trying to copy and paste... forgive the formatting. Anyone interested in my spreadsheet, let me know. I'd definitely be willing to share if I get some good feedback here. Property is in Bayshore, NY

Purchase Price/Offer (Bld: $192,500.00 Lnd: $82,500.00) $ 275,000

Down Payment $ 13,750

Mortgage $ 261,250

Interest Rate 4.25%

Monthly Payment $ 1,286

Closing Costs $ 13,750

Repairs $ 5,000 (probably doesn't need repairs)

Total Initial Investment $ 32,500

Estimated Income

Rent $43,200 (2 units at $1,800/mo each)

Vacancy $(2,160) (5%)

Net Revenue $41,040

Estimated Expenses

Property Taxes $8,694

Property Insurance $1,200

Management $4,320 (10%)

Repairs and Maintenance $3,024 (7%)

CAPEX $3,456 (8$)

Utilities $-

Accounting and Legal $-

Advertising $-

Lawn and Grounds Keeping $- ..... all paid by tenant (Thinking back now, I should probably include this cost for vacancy... Updated the worksheet and even if I end up paying 5%, Cash on cash return isn't terrible)

PMI $2,400

Total OPEX $23,094

Net Operating Income $17,946

Less:Mortgage Payment $15,432

Cash Flow $2,514

Less:Depreciation $7,000

Add:Principal Payment $374

Taxable Income/(Loss) $(4,112)

According to my calculations....

Loan to Value 95.00%

Cash on Cash Return 7.74%

Cash Return on Assets 0.91%

Capitalization Rate 9.32%

Rent Ratio 1.31%

Gross Rental Yield 15.71%