All Forum Posts by: Paul Cijunelis

A freind and i plan to partner up and become RE investors. Should wecstartvan LLC? An LLC for each of us? We dont have an accountant or tax advisor yet...and am wondering what would be the best method to form this partnership. We are in Illinois. Thanks so much...

Warning, Noob question:

JeffS wrote: The rule (if you want a rule) would be the 50% rule. Don't let the mortgage pymt, PI only, exceed 50% of your rent.

What does "PI" stand for here?

I'm totally new and haven't gotten my first property yet, but want to post my opinion for comments on my train of thinking, as I consider this an exercise for me to learn so take this with a grain of salt:

Your cap rate is sub-6% on this deal
The "2% rule" falls at 1.15%

The numbers look pretty weak. You haven't told us about long term expenses either. How's the driveway? The Roof? HVAC? If these will come at a cost to you in the next 1-5 years, your numbers will get even worse. I haven't even done this yet and I know hidden costs will ALWAYS appear.

The 0% deal is an enticer, but I think the seller is using that to cloud the buyer's numbers. Honestly I don't think I would do it. I would offer $100k max with the same financing depending on the inspection and long-term issues.

What is an appropriate range for the cap rate in "this market"? Obviously the higher the better, but am curious what the pros are looking for.