All Forum Posts by: Tom Wagner

Hi Ishan, what do you like about this calculator? I'd love to learn a little bit more before putting in my credit card! 

I've poked around the internet extensively looking for a calculator I like but haven't found the perfect one. Any suggestions are appreciated!

Additionally, I'd love to hear what people are looking for in an awesome buy-and-hold calculator? For me, the ability to see how 2% vs 4% rent appreciation and/or 2% vs 4% property appreciation affects my long-term cash flow and equity is key. It may not sound like a big difference, but get to Year 10 and it is a *massive* difference. $3,000 monthly rent appreciating at 2% per year for 10 years turns into $3,656/month or $43,782/year, but 4% rent appreciation turns into $4,440/month or $53,288/year.

A calculator that has the ability to simulate various appreciation scenarios quickly is important to me, and hard to find.

Any update on the progress of corrections to the new calculator? And are PDF's available in the new calculator yet? Thanks!

I am currently under contract on a property financed via 203k. Such an underrated financing option!

Regarding lenders, see the following report for a list of lenders originating 203k loans, broken down by state and total volume:
https://apps.hud.gov/pub/chums/f17fvc/F17FVCY-20200701.txt

Looks like the top lender is "Primary Residential Mortgage" but that there are a number of big players in the Baltimore area.

This is true. The allowed exceptions are:

- an increase in family size

- vacating a jointly owned property

- relocation

- non-occupying co-borrower

See the following guidance from HUD for the exact rule: https://www.hud.gov/sites/documents/4155-1_4_SECB.PDF 

3.5% on 500k is 17,500 and he wraps whatever he can into the loan. Might not get all the way to 500k but could get close!

I'd be curious to learn from experienced MFH investors what inputs are different than SFH deal analysis. Presumably the standard stuff still applies -- purchase price, ARV, percentage down, rental income, vacancy, R&M, capex, debt service, etc.

Obviously at the end the analysis changes slightly, as you value the property based on NOI and cap rate. What else about MFH analysis is significantly different than SFH analysis?

Interest rates are at historic lows, with par rates sub-3%. To me, that makes the answer an obvious choice -- an FHA loan on a duplex, triplex or fourplex. Find the most expensive property you can that is cash-flow neutral or cash-flow positive, max out your leverage ($20k / 3.5% = ~$500k) and set yourself up to benefit from future appreciation and cash flow.

A cash-flow neutral property now will be cash-flow positive very shortly, particularly if inflation increases in the coming years. And while you can never bank on appreciation, a $500k house appreciating at 3% per year is worth $670k in 10 years. Combine that with debt paydown, tax benefits and cash flow, and you are starting to build some serious longterm wealth with only $20k down.

I vote for A. Linking an interesting article to support my vote below. The Top ~200 universities in the USA will continue to be safe investment locations, both this year, next year and for the next 20+ years.

https://www.marketwatch.com/story/more-than-3-in-4-college-students-plan-to-return-to-campus-this-fall-but-they-promise-not-to-party-2020-07-15

A lot of good information in this thread. I'll add a few quick thoughts:

- Population growth (and projected population growth going forward) is a good way to get an idea on the basic direction of a metro area. It will quickly become apparent if the city is growing (such as Denver, Austin, Jacksonville, etc.) or shrinking (small towns, many cities in the midwest and rust belt). While you can find good cash flow in cities that aren't growing, it is unlikely your property will appreciate and it may even lose value or become harder to rent, which is a risk that should be considered. It is sometime hard to work with, but the US Census provides this data.

- Regarding submarkets, I think this type of stuff is best explored via relationships with realtors, other investors and local residents. I recently narrowed down my search from the entire NYC metro area to a specific area (Hudson County, NJ) and did so after extensive conversations with a number of people from all facets of the industry. A good place to start would be a Real Estate Investing Facebook group for an area you are considering.