Newbie - Austin, TX

4 Replies

Hi everyone, my name is Erez. I recently got into BP and love it! I really enjoy the podcasts and the blogs. So much to read and not enough time :-)

I thought I’ll drop by to say hello to everyone and let you know that this is awesome. You made me start taking action (Thanks Brandon!!!). I am working on my first deal as a buy and hold investment in Austin and very excited about it. 

Not sure it is the “perfect” deal in terms of numbers but it’s not too bad.

“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing."

Theodore Roosevelt

I am somewhere on the boarder between right and wrong but after years of over analyzing it’s time to take action.

Couple of questions I couldn’t figure and need some help with:

  1. 1. Realtor or property management fee to find a tenant would cost between half to 1 month rent to the owner. How do you plug it in to your calculation? How can I estimate turnover? Any other expenses I need to consider when replacing tenants?
  2. 2. Let’s say I took a mortgage of 100,000 for 10 years. Assuming there is no appreciation or deprecation and I am selling the house after 10 years. Would you calculate the $10k gain in my equity every year ($100k/10 years). Is this the right way to think about the deal? Am I missing something here. Since the biggest benefit of real estate investing is leveraging other peoples money I want to count for that as well in addition to cash flow.

Any help is greatly appreciated.

Thank you and good luck to all of you!

Erez

@Erez Raveh

Welcome to the site.

Generally you can assume around 50% of all rents collected are going to go towards your expenses.

PM fees, turnover, utilities, non payment etc.

Welcome Erez!

I am just learning about the rental market myself but I do have experience in Fix & Flips and purchasing NPN's. I am also in Austin so if you would like to connect and expand your network send me a connection request. I also like to JV on deals if that is something that also interests you.

I hope to hear from you and have a great time learning on BP.

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