All Forum Posts by: Matthew Gu

I've been keeping eyes on two properties and requested the repair history from the current PM. Property A has very frequent repair history (30% rent went into repair last year), the largest ones being "new LVP", "kitchen cabinet paint", "New Gas Furnace" and "misc repairs" (I can't tell what it is from the report). Property B has normal repair history (costs about 10% rent). Which one should I go for? Here's my thoughts:

Property A: already repaired so many times, maybe it's less likely to have problems again?

Property B: maybe tenants are a lot nicer

0 Votes

Hi folks,

I'm planning to invest in little rock area and I've narrowed down my search to Benton and Sherwood areas. They both have nice RTV ratios from some search on MLS, but I'd also like to compare the tenant quality, turnover rate (vacancy time / rent market), and any specific areas to avoid. Would really appreciate any input from anyone with experience in these areas!

My plan will be buy-and-hold long term and generating cashflows. Purchase range is 140k-200k.

1 Vote

Little Rock, Arkansas

Thanks! These are indeed turnkey properties. I try to avoid tear-down properties or the ones with structural problems because I'm scared of the risk. Sounds like I need to dive deeper and find other resources.

Originally posted by @Jaron Walling:

@Matthew Gu You're not really missing anything in your calculation. What you're missing is a better price. Sounds like you're aiming for a turn-key type property. I'd encourage you to work with a turn-key provider, find something distressed (value add) or go off market otherwise you'll continue to get the same results.

Those numbers are identical to the neighborhood I live and invest in. The nice and shiny properties on the MLS will NOT cash-flow in today's market. Properties I purchased only 2 years ago barely met my criteria for a future rental and they were all distressed and negotiated to a lower price.

Do not quit trying. Keep up the good work and networking and connecting with locals in your market. Find people that understand the 1% rule and what your criteria actually means.

0 Votes

I feel it extremely difficult to have positive cashflow when RTV is lower. I searched through zillow for several promising places like Tulsa OK, Indianapolis IN and Memphis TN, the best RTV I can find is around 0.75% in Tulsa. Here's the breakdown of all the cost and incomes:

home purchase price: 140k, rent per month: 1100 (RTV=0.79%)

Income: 1100*12 = 13,200 per year

Down payment 30%, interest rate 4% => mortgage per year is 5,600

1.5% property tax, 1% maintenance, 1.5% home insurance => another 5,600 per year

PM fee: 10% rent per month + 100% rent for new tenant (assume tenant stays for 3 years) => 1,320 + 1,100/3 = 1,686 per year

Total cost: 5,600 + 5,600 + 1,686 = 12,886 per year

There's barely any cashflow and does not even include the vacancy time between lease, legal fee in terms of a dispute/eviction etc.

So the question is, should I try harder to find 1% properties in these areas, or there's something that I miss in the calculation above?

1 Vote

All Forum Posts by: Matthew Gu

Matthew Gu has started 3 posts and replied 5 times.

Post: How bad is frequent repair in the past year?

Post: How bad is frequent repair in the past year?

Post: Comparing between Benton and Sherwood

Post: Anyone managed to generate cashflow when RTV is less than 1%?

Post: Anyone managed to generate cashflow when RTV is less than 1%?