All Forum Posts by: Yun Han

Cash flow should be calculated after estimated vacancy, repairs, and capex reserves. If you are already negative, you are actually probably doing worse than your estimates. If you got rid of PMI, I'm guessing you got an appraisal or refinanced? Did you roll those costs into the loan? Is this your only property? Can you manage yourself and remove the PMC fees? Have you searched for a cheaper insurance carrier? There are lots of ways to cut costs, but being that far in the negative is going to be difficult to make sense, in my opinion. It may also be difficult to sell in the current market. Do you have the current comps? Is the area known to appreciate?

What is the current market rent? If you are well below market, you may need to increase more than 4% (check state laws). Numbers don't lie, and if the numbers don't work, then it's not worth holding, in my opinion. If you can't get at least back to even with accurate and conservative estimates, I would consider going a different route. Cash flow is king, appreciation is a bonus. Just remember, rates are not your friend right now, so if you're looking for a killer deal, you'll have to put in some work and be very creative.

Just noticed you said you can't manage yourself, being remote. If you have a great rate, it's in a great area, and you can get close to breaking even, it may be worth it to hold. Other than that, 1031 into another property may be more ideal, imo.

It is in a good area imo and the area definitely tends to appreciate. I agree that cashflow is king and I do want to make numbers look right and keep it.

Is there a way to decrease the monthly mortgage? What did you mean by "did you roll those costs into the loan"? I did get an appraisal after improvements and submitted it to the lender which changed LTV from 95% to 71%. The loan amount did not change.

This is one of 2 properties I own so far, and the other one is my primary residence. I will check if I can find cheaper insurance. Do you see any other ways to cut the costs?

0 Votes

Los Angeles County, California

Quote from @Ruchit Patel:

If you did put lot of work like you are saying, did that increase the of the house significantly?

If yes, why not sell, 1031 exchange to save tax in gains, and then buy cash flowy turnkeys or airbnbs in Florida!!

That's what I do.

Yes, value was reappraised to 830k from 650k. So the LTV went from 95% to 71%.

Thanks for the advice on 1031!

0 Votes

Los Angeles County, California

Hey everyone,

I have a question about tax services that I'm hoping to get some advice on. So, my employer is providing Deloitte tax services for me this and next year, which is pretty cool. However, I've only ever worked with local CPAs in the past, and I'm not sure how working with such a big company will be. I have this gut feeling that they may not be able to save me as much money on taxes as a good local CPA could.

What do you think? Would you recommend sticking with a local CPA, or should I give Deloitte a try? Keep in mind, I recently moved to a different state, so I'd need to find a new CPA anyways if I don't use Deloitte.

I'd appreciate any advice or insight you guys might have. Thanks!

My employer is paying for tax service from Deloitte this year. I have only worked with a local CPAs so far. How is it to work on tax with such company? From guts, I for some reason think they won't be able to offer to save much tax compared to good local CPAs. Would you recommend to work with a local CPA? I moved to a different state, so I would need to find one anyways if i were to now use Deloitte.

1 Vote

Hey everyone!

I wanted to get some advice about my investment property. So, in 2020, I bought my first house with only 5% down. I put in a lot of work and made some improvements while I lived there for a year, which helped me get rid of the PMI. Now, I've been renting it out for the past 1.5 years, but unfortunately, my monthly cash flow is -$200 when I consider rent, mortgage, and management fees at 6%. And this doesn't even include other possible expenses like vacancies or improvements.

So, what do you think? Should I hold onto the property? If so, any tips on how to generate some positive cash flow? Or would it be better to use this as leverage to invest in something else?

Oh, and by the way, I did raise the rent by 4% last December. Also, I moved to East Coast so managing the property myself is unfortunately not an option.

2 Votes

Los Angeles County, California

All Forum Posts by: Yun Han

Yun Han has started 6 posts and replied 14 times.

Post: Negative Cash Flow on Rental Property - Hold or Sell?

Post: Negative Cash Flow on Rental Property - Hold or Sell?

Post: Deloitte vs Local CPA: Which Tax Service is Best for You?

Post: Negative Cash Flow on Rental Property - Hold or Sell?