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All Forum Posts by: Kevin Sage

Kevin Sage has started 7 posts and replied 17 times.

Post: How much is too much off of MLS for decent return?

Kevin SagePosted
  • Columbus, OH
  • Posts 19
  • Votes 8

Agreed, I think I got hung up on this property because the house was in poor condition to similar houses and I knew the seller is motivated (empty house). Otherwise, I think it wouldn't have wasted 3 minutes on it. Lesson learned.

Post: How much is too much off of MLS for decent return?

Kevin SagePosted
  • Columbus, OH
  • Posts 19
  • Votes 8

Will,

Thanks for the quick reply and words of wisdom.  I actually have a list of houses to mail out yellow letters to, so I'll have to make that a priority! d

Post: How much is too much off of MLS for decent return?

Kevin SagePosted
  • Columbus, OH
  • Posts 19
  • Votes 8

Hi everyone, I recently looked at a local B/B+ property that has a longer than average time on the MLS. Both the agent and myself agree that its overpriced by ~$20,000, mostly due to the fact that besides paint, carpet and appliances the house hasn't been updated for 20+ years.

I am familiar with local rental prices and feel that this property is on the lower end of comparable houses because if its size and number of bathrooms. I've used the BP Rental Property calculator and excel for an IRR and found that I need to purchase the house for $100k (40%) off of MLS price to average 15% over 5 years (this includes $25k in upgrades, equity, in the house and $100 a month rental in profit). The 10 year return comes out to be 7%. This is with conservative inflation and rental increases at 1%.

The question is 15% too high for expectations for an average return for 5 years? I feel comfortable with with the numbers, although I admit they are conservative. My agent said he would make any offer that I want, but thought 40% off was too steep and their suggested price provides negative cash flow and 4% IRR. I'm just trying to figure this out for future properties. I appreciate any thoughts or words of wisdom that anyone may have.

Post: Struggling to find second property

Kevin SagePosted
  • Columbus, OH
  • Posts 19
  • Votes 8

I wanted to thank everyone for their input and great advice. There is a lot of BP members willing to assist. Thanks so much!!

Post: Struggling to find second property

Kevin SagePosted
  • Columbus, OH
  • Posts 19
  • Votes 8

Hi everyone, I am in the Columbus, OH area and currently have one rental property and am currently challenged in my attempts to find my second property. The first property is a college rental that found on MLS after several months of searching. My thoughts are to remain in the Columbus area as I begin to learn the process. Going forward I do not see myself continuing to manage properties because of full time job (60+ a week). Does anyone have suggestions on a good next step to find properties (real estate agent, turn key or property manager)? I appreciate any advice that anyone can offer. Thank you.

Thanks for the great responses and advice.  Both of your suggests definitely help with keeping the need and timing of upgrades in perspective.

I am recently in contract for my first property, a college rental that was built in the 1950s. The property has great cash flow, but is drastically outdated and need repairs inside and out. My questions is should I keep my cash flow (profit) to maintain the the COC return 11% or use it to make the necessary repairs to the property. Personally, I do not require the cash flow for living, just looking how to put it to its best use. BTW, comparable houses that are updated inside and out look like they are selling for at least $45,000 + compared to my property. I appreciate any advice.