Hit my goal! Still need help
hey guys so a year ago I joined biggerpockets!! I mentioned it was my goal to have around 8-10k saved up in one year and I did it! Ive also taken my biggest step so far and actually called a real estate agent about a property i was interested in to figure out its current rents and expenses!! My goal is buy and holds and where I live there are mostly SFH's. My problem is finding a deal where my numbers work!! With taxes, insurance, PITI and operating expenses my projected max price is around 70k. Are my operating costs too high? My target rent would be 1200 for a 3 bed 2 bath home.
Added expenses ive used on every deal ive analyzed. Vacancy 10%, Capex 10%, Repairs 5%, Property management 10%. Are these numbers too high? They end up being higher than the 50% rule when I add in taxes and insurance...
Thanks!!
@Matthew Hamilton nice job on hitting your goal! Keep grinding! Your numbers are not too high, and especially for your first property you want to figure conservatively so your not surprised with negative cash flow on your first go round.
Thank you Jeff Wallenius I will keep looking. For multifamily homes will these be the same? Let's say a triplex that rents for 3000$ /month is 10%,10%,5%,10% or 1050$ too much? Or that's about right too
@Matthew Hamilton many factors with multifamily. While you can reduce your CapEx as your still only saving for one roof, keep in mind you have multiple appliances, heating/cooling units, etc. You may be able to find management for cheaper, but don't bargain shop as you want a solid team in place for the management of your investment. Vacancy rates vary widely by area, in our area most is less than 1% so do your homework on vacancy. Drive the areas, look for rent signs and start calling landlords. Ask lots of questions, contact other investors, etc.
Jeff Wallenius makes sense I will definitely reach out to landlords that makes total sense. I would most likely do an fha loan and plan to manage myself for now but still factoring management because maybe I move or hate landlording. Make sense? Can I tag you in a previous post of mine for your input ?
Jeff Wallenius tried to tag you but didn't work. It's called triplex analysis help!!