All Forum Posts by: Yishi Garrard

Okay, that's great to know. Thanks for the input. A follow up question would be do you use that "50% Rule" when calculating cap rates, or do you use a different % to not include capex? 

Hi, What % do you use as your "rule of thumb" for estimating annual operating expenses when evaluating an income property? Here in Tucson, AZ, most properties that I manage for clients are running between 20-28% expenses of gross rents (excluding Capex, and including management fees of 10%). so I (and my partners) run a 30% expense estimate when evaluating deals. However, I've seen a few people talk about a 50% rule. Does that 50% also include capital expenditures? I'm essentially trying to see if there's a wide variance geographically, or if somehow we've gotten lucky. (FYI, we manage about 300 doors of all different property types, so I feel like it's a pretty good sample size).

Always double check the written leases to make sure the amounts match up to what the seller is claiming.

Also, check the rental comps to make sure the area can sustain the current rents. You don't want to buy a rental property only to find out that you have to drop the prices once the property turns vacant.  

Old properties like that can have lots of deferred maintenance. Be sure to get a thorough home inspection. 

Hi Christian,

Great to hear from a fellow Tucsonan as well! I'd be happy to network. If you want to shoot me a private message on what your goals and current projects are, I'm sure there are opportunities that we can be of mutual benefit for. 

As far as your construction experience, do you have your GC license? 

Hi,

I'm an agent and partner in a local real estate brokerage here in Tucson, AZ , and I'm new to the site! I don't have any personal investments in real estate, but I plan on acquiring my first rental property in 2015. Luckily, the unique situation that I'm in with my company has given me tons of secondhand experience (see my profile) , and combined with the wonderful BP community, I hope to achieve great success in real estate!