Deduct NEW property taxes after you buyDeduct home insurance costsDeduct maintenance percentage, typically 10%Deduct vacancy+tenant nonperformance percentage(we recommend 5% for Class A, 10% Class B, 20% Class C, good luck with Class D)Deduct whatever dollar/percentage of cashflow you wantNow, what you have left over is the amount for debt service.Enter it into a mortgage calculator, with current interest rate for an investment property, to determine your maximum mortgage amount.Divide the mortgage amount by either 75% or 80%, depending on the required down payment percentage - this is your tentative price to offer.If the property needs repairs, you'll want to deduct 110%-120% of the estimated repairs from this amount.Be sure to also research the ARV and make sure it's 10-20% higher than your tentative purchase price.As long as the ARV checks out, this is the purchase price to offer.It is probably significantly below the asking price.

Hi Glenn, Typically hard money lenders depending on their situation and if they do it as a business treat the income as interest income or business income.

This typically means lower down payments and better interest rates compared to traditional investment loans.

Good tenants do not typically apply for overpriced apartments.

This fee is typically a percentage of the remaining balance and can vary based on the loan agreement.2.

They typically do a soft pull close to the closing date to ensure there are no new debts or significant changes in your credit profile.

Since the BRRRR strategy relies on recycling your capital, it’s typically better to stick to the minimum needed for favorable loan terms.Also, consider leaving a cushion in your HELOC or reserves for unexpected rehab costs or delays.

A six-month supply is typically considered a balanced market.

I agree on the point of your investment is not guaranteed and never fall in love with the sticker price of the offering (ie returns), you really need to look under the hood on these dealsBut active investing is not for everyone and if you do not have the time to manage your active investments, it’s not like the stock market where you have as good a chance to return on your portfolio doing nothing than hiring a manager - if you do not have the time nor ability it typically will not end well.

I agree—most of these individuals aren’t paying taxes and aren’t typically aiming to own the property.