All Forum Posts by: Łukasz Juraszek
Łukasz Juraszek has started 6 posts and replied 19 times.
Post: Using FHA to start BRRRR?
- Posts 19
- Votes 13
@Craig Kaspar I don't know what market you're in but in Bay Area sellers want either a all cash offer or 50% down... my RE agent laughed at me when I brought the idea of FHA...
In the book How To Invest In Real Estate, the author claims that a property that doesn't meet the 1% rule will never be cashflow positive.
Here is a proof against it. Buy a property for 500K cash, rent out for 2.5K, subtract 1.25K on operating cost, and you're left with 1.25k in cashflow.
Is the author wrong or am I misunderstanding something 🤔?
Post: Practice Deal Analysis (Auburn, WA)
- Posts 19
- Votes 13
Hi there,
If you haven't seen my other deal analysis posts, I find SFRs that I think would be a good investment and practice deal analysis. Here's another property that got my attention:
214 M St NE, Auburn, WA 98002 2Beds 1Bath 1,040 Sq.
https://www.redfin.com/WA/Aubu...
The reason it appears interesting to me is that it is located in a neighborhood where comps are around 350-370K. Although CoC ROI is basically 0, after cash-out refinancing, it would be a pure cashflow property.
As for the downpayment, and rehab, I would front my own money. I'm not sure about the rehab cost as I haven't seen the property, nor its inspection report. Despite that, it seems the property leaves $55k for a rehab and would still make it a good BRRRR. Thoughts?
| Property Value | $215,000.00 |
| Down Payment % | 20.00 |
| Down Payment | $43,000.00 |
| Rehab | $15,000.00 |
| Loan amount | $172,000.00 |
| Interest rate % | 3 |
| Loan term (years) | 30 |
| Monthly Rent Income | $1,383.00 |
| Taxes | $143.33 |
| Insurance | $75.25 |
| Utilities | $0.00 |
| Management | $138.30 |
| Vacancy | $69.15 |
| Rapairs | $69.15 |
| CapEx | $138.30 |
| Mortgage | $725.16 |
| Actual monthly payment | |
| Total interest paid | $89,057.15 |
| Cash Flow | $24.35 |
| CoC ROI | 0.50% |
Post: Indianapolis, second (better) analysis
- Posts 19
- Votes 13
Originally posted by @Eddie Brady:
Where are you getting your rent estimate from? $1300 is extremely high for this area.
rentdata.org
Now that I also looked it up on rentcafe: https://www.rentcafe.com/houses-for-rent/us/in/marion-county/46219/?Beds=TwoThree&Bathrooms=Two it does seem high.
Post: Indianapolis, second (better) analysis
- Posts 19
- Votes 13
Hi there,
I got very useful feedback on my previous Indianapolis analysis. Wanting to improve, here's another. I moved my search to a better neighborhood. Here is the listing: 153 S Spencer Ave, Indianapolis, IN 46219
And here's the breakdown:
| Property Value | $85,000.00 |
| Down Payment % | 20.00 |
| Down Payment | $17,000.00 |
| Closing cost | $2,000.00 |
| Rehab | $10,000.00 |
| Unearned rent | $3,600.00 |
| Loan amount | $68,000.00 |
| Interest rate % | 3.5 |
| Loan term (years) | 30 |
| Monthly Rent Income | $1,300.00 |
| Taxes | $56.67 |
| Insurance | $29.75 |
| Utilities | $150.00 |
| Management | $130.00 |
| Vacancy | $65.00 |
| Repairs | $65.00 |
| CapEx | $130.00 |
| Mortgage | $305.35 |
| Actual monthly payment | |
| Total interest paid | $41,926.15 |
| Cash Flow | $368.23 |
| CoC ROI | 13.55% |
| Value post rehab | $125,000.00 |
| Cash out refinance | $87,500.00 |
What additional factors should I consider?
Best regards,
Lukasz
Post: Searching for a market, duplex in Indianapolis.
- Posts 19
- Votes 13
Originally posted by @Darius Ogloza:
You will be hard-pressed to find financing for a $25,000 property. Your closing costs would likely add another 20% to your purchase price in the unlikely event you found someone. Your calculations also fail to explain how you will get the $60,000 to do the rehab. Putting your own cash into a war zone property? You would be half way toward a down payment on a place in Milpitas with that money. The great hazard of investing out of area is not knowing the market. Everything looks cheap from the perspective of San Jose. But cheap is not what you want; you want value. If everyone obeyed the 1% rule, no one would have invested in Bay Area real estate over the past 30-40 years. However, people have invested and continue to invest and many of those created seven, eight and dare I say nine figure net worth doing so. The answer lies in your own back yard.
It didn't occur to me that there would be a problem financing such property, thanks! Although I could get it for cash and self-finance rehab, I intended to use private lenders money. I spoke to a real estate agent and she mentioned up to $50k at 6%.
With regards to Milpitas, let's say I can cough up $150k for a down payment. That would allow me to buy a property up to $750k. I still don't see how I could make that cash flow positive. Could you elaborate more on that?
Post: Searching for a market, duplex in Indianapolis.
- Posts 19
- Votes 13
Originally posted by @Matt Silverstone:
@Łukasz Juraszek i don’t know the exact answer for this property but make sure to check it’s not in a flood zone either before purchasing or simply know what also goes into that type of investment opportunity (flood insurance and less resale value/appreciation)
@Matt Silverstone great point! What other types of zones should I look out for regardless of the area I'm looking at? In California that would be fire zones?
Post: Searching for a market, duplex in Indianapolis.
- Posts 19
- Votes 13
@Ric Ernst All great points! Thank you. After further research the area appears to be distressed. Low to very-low incomes, most children in school receive free meals, high crime rate, and on top of that there are 104 registered sex offenders living in that zip code.
Post: Searching for a market, duplex in Indianapolis.
- Posts 19
- Votes 13
Hi there,
I live in South Bay of Bay Area where I have a difficult time finding multi-unit properties that come anywhere close to 1% (most are <0.5%). After listening to the podcast 301, I figured it might be better to get started in an area with greater supply. Here's my first analysis. What do you think?
My rent estimates are based on rentdata.org
1149 W 30th St, Indianapolis, IN 46208 | MLS #21690508
Duplex, near downtown (potentially airbnb, main goal long-term rental)
Property Value | $25,000.00 |
Down Payment % | 20.00 |
Down Payment | $5,000.00 |
Rehab | $60,000.00 |
Loan amount | $20,000.00 |
Interest rate % | 3.5 |
Loan term (years) | 30 |
Monthly Rent Income | $2,000.00 |
Taxes | $16.67 |
Insurance | $8.75 |
Utilities | $0.00 |
Management | $200.00 |
Vacancy | $100.00 |
Repairs | $100.00 |
CapEx | $200.00 |
Mortgage | $89.81 |
Cash Flow | $1,284.77 |
CoC ROI | 23.72% |
Value post rehab | $85,000.00 |
Cash out refinance | $59,500.00 |