All Forum Posts by: Tyler Gibson

@Ron Alexander get a 1 million dollar umbrella policy and call it a day. 

@James Orr I sit for the state test today and will be joining a brokerage later this week. Send me a message of what info you are looking for and I will see what I can put together for you. 

@Jay Jonez He doesn't own the property yet. Land contract means that the deed is in the other persons name still. The property could have a mortgage on it too. This all seems very complicated. How much does he want to assign the land contract to you? Technically that is all he can sell you right now. You need to know everything about the land contract before you can even know if it is a good idea or not. 

@Phillip Scalise you can look up here if Fannie own your loan. 

https://www.knowyouroptions.com/loanlookup

@Min Kim So I currently don't pay myself anything but that is because I am trying to grow my portfolio so that one day I have enough cashflow that I will not need to have a 9-5 job. I can't say what the best practice is as it is all up to personal goals and preferences. I would thinking holding 10k in reserves would be fine to then start paying yourself the cashflow but it all boils down to goals. 

@Min Kim So What I meant by numbers is purchase price, cash down, taxes, insurance and management rate. if the rate is 125 a month it works out to 5% based on monthly rent. I ran some numbers assuming some items. 336k purchase 100% financing (i know it isn't true but using this for the sake of running numbers. 5% vacancy loss, 5% management, 4800 taxes and insurance, 5% repairs, 504 annual HOA. that makes you NOI 20,346 and a cap rate of 6%. Cashflow before taxes $1097 net taxable loss after depreciation of -4k.

overall I think you are in a fine spot but the numbers in a spread sheet show you do not have 386.00 monthly net cashflow. you haven't accounted for vacancy loss or repairs. since you have reserves built up then you are in a pretty good spot but it isn't a cash cow. 

@Blake Hulett SFH can and do work but it all hinges on how you buy and what the market will support in terms of rental rates. If you are young single and cash poor buy a 3-4 bed house with FHA loan and rent rooms (house hack).

@Tope Babs yeah they might have got you on that one. They probably slapped some duck tape on it and called it good. Not sure you have any recourse now unless you have something in writing. even if you do have something in writing it might cost more to get them to do the right thing. I think if you really want something to happen your only option that could be cost effective is to hound the broker about why the repairs they said would be done are not done well. Have difficult conversations with them no how their performance raises concerns of their business practices and that you are looking for some sort of resolution that can make this feel right. You will need to compromise if they offer anything at all but share with them that how they handle this situation will affect what you tell others about their business. 

When I am looking for people to do the right thing I always share that doing the right thing makes me want to endorse you. not doing the right thing will encourage me to go to BBB, google reviews, and any other internet forum to share my experience. How you act will determine what I share with the world. I don't threaten or at least I try not to position it that way. I simply state that I'm going to talk about my experience you get to decide what I say. 

@Ryan Woods if you can house hack then you should do that. If you can't then you should rent. Even if your house hack doesn't pay the entire mortgage but it can reduce your cost of living compared to renting then it is a good investment. I did a house hack before I knew the term and it was a good choice. Wish I had known about it sooner. 

@Min Kim I think you are doing the math wrong. Cap NOI would not include the debt service. This means that the mortgage payment would not be included in the expenses. To get NOI the industry standard way take (Gross rents) - (Expenses)=NOI

expenses include... vancacy loss, management, taxes, insurance, repairs/maintenance.

If you want to put those number here in the forum I can plug them into my spread sheet and give the you cap rate. I think I see a typo in your numbers you wrote purchase price of 336k but then did the math on 386k. Give me the numbers and I can put them in my excel sheet. 

You are establishing the cap rate based on your net profit which is different from your Net operating income. 

@Tope Babs it sounds like you worked with a wholesaler. They don't want you to see that they paid the seller significantly less then you paid. This is common practice in wholesaler world. The reality is if you think you got a deal then what does it matter if they made money in the middle. If you have clear title then I would not worry about it.