All Forum Posts by: Tony Castronovo

Now, you didn't mention CAPEX (expensive items such as roof, HVAC, hot water heater, etc.). That is something else you should add as a monthly expense. Ranges may vary, but I think another 5% is sufficient. So your $100/mo would probably be a good/conservative number including both maintenance and capex.

%5 of gross rents.  So in your case this would be $40/mo.

I had something similar once.  It was 3 possible roommates.  RM#1:  Let's consider him as the primary.  RM#2: Sister.  RM#3: Sister-In-Law (wife of sister).  RM#1 and #3 came by to see the property.  Never met RM#2.  RM#1 gave me his license and SS card...had paystubs, etc. on the spot.  RM#3 filled out the online application (used RM#1's info....but HER contact info).  I never did get RM#1's email/phone.  After the first meeting, I only ever got to speak with RM#3.  She kept insisting that she and RM#2 didn't want to complete an app until they knew RM#1 was approved.  RM#1 had good income, good credit, and clean background.  He qualified on his own.

The thing here was that I felt like they were hiding something.  I need to meet anyone who is going to live in one of my homes (I do my own property management).  The fact that I couldn't communicate directly with the primary tenant...and the fact that the other two didn't want to complete the application got me very suspicious. 

I am perfectly fine if one person has the income.  And I am ok if roommates have poor credit.  But I am cautious to have a couple of prospective tenants seemingly use a friend or relative as a qualifier when I wouldn't consider renting to them otherwise.

The maintenance is pretty high.  Normally, this is estimated around 5% (but may vary based on age of the property, up front renovations, etc.). 

The insurance will vary based on whether you need a Builders Risk policy and vacancy coverage (which you typically need).  Depending on the location, you may also need flood insurance.  My rule of thumb is about 1% of insured value.  You didn't indicate the value (just asking price).  But if they are the same in this case I would expect your annual premium to be around $650.  I am no insurance expert, but that's my experience.

Not sure what criteria you are using for "good lending banks".  I have a great mortgage company that has a lot of experience working with investors.  They are based in Katy.  Let me know if interested. PM me and I can provide contact info.

Based on the information you provided, I would think a buy & hold would tie up too much of your money right now and keep you from growing your business.  A flip would involve some upfront money but you would hopefully make a decent return and allow you to build up some cash before holding onto a property.  Wholesaling could be a way to get started with even less money. 

Do you have the option to live in a home for a year or so if you were to purchase a property?

Hi @Kimberly Daughtrey. I currently have 3 rentals and have been doing my own property management. As I continue adding properties I know there will come a time when I can't do it all alone. Let's stay in touch.

Welcome to BP, @Jessie Lozano!

Actually @John Weidner I knew the comps well....I was just in denial.  I thought I could get a higher price...too much emotional investment I suppose.  Now I am much more conservative and let the numbers do the talking.

As for the rehab costs, I admit I let this one get away.  The half bath was not planned for in the original economics.  The other killer for me was that my original estimates were tainted.  My prior rehab was all DIY.  Since I know how to do the work myself my estimates were tainted with what it would cost "me" to do the work....which is MUCH different than what contractors charge.  I still struggle with this one, but have gotten much better.  My last rehab I budgeted $18,000 and came in  at $18,036. ;)

Welcome to BP @Bradley Shive!