All Forum Posts by: Van Wagner

Hey everybody, I'm a new investor in the Denver area and have a questions that I just can't seem to find a good answer for. I'm wondering how you estimate expenses for properties that are more expensive, around $400,000. Obviously the 2% rule breaks down for properties of this value and it seems like the 50% rule should too, but I'm having a hard time figuring out what this figure should be instead. According to the 50% rule the property that I am looking at should have $1150 in expenses per month which is totally unreasonable. Instead, I'm assuming 5% of the rent (~$2300) in expenses per month along with $150 per month in CapEx for a total of $265 per month in maintenance. I'm making these assumptions for a deal that on a 1500 sq. ft. single family with 3 beds and 2 bath that is recently redone with a new roof, no foundation issues, and is in relatively good shape. For that reason I'm still having a hard time believing that I'll be spending $265 per month on expenses. Do any of you have any idea what a good assumption would be?

Thanks!

Hi Eric,

Since you're so new, I'd recommend doing some research into alternative financing options. There's actually far more options than you'd thing. BP is obviously a great resource for learning along with "The Book on Investing in Real Estate with no and Low Money Down" and the Bigger Pockets podcast. Start with researching things like hard money lending, private lending and seller financing, that will likely get you off on the right foot!