All Forum Posts by: Adam Bartomeo

Read Cash flow quadrant, be far a better book. It is the second of Kiyosakis books.

I always allow pets. The benefits FAR out way the negative. All pets must be approved by the owner, we charge a pet fee, we increase the deposit, we get higher rents and our vacancy rate is close to zero.

The reason that all of this is possible is because we allow pets. Our last tenants pet must of had some accidents in the property because it stunk like urine. The deposit covered the odor removal and for new carpets and pad. We had the SFR rented within 2 days of move out.

I do a walk through a month before the tenants are moving out to give them an idea of what needs to be repaired for them to get their deposit back. (I don't want it to be a shock when they don't get all of their deposit back) I also let them know what they are not allowed to fix because I don't want them doing a DIY'er job when I gave them a professional job when they moved in.

My father in-law has about 10 properties that are similar to mine. His are in a better neighbor hood and are in better condition but his get lower rents and stay on the market WAY longer then mine do. He doesn't allow pets!

Have you interviewed property management companies to verify these assumptions? They should be able to give you all of the info. Are you accounting for any other expenses? - T&I, mortgage, utilities

@Felipe Ocampo @NA Sho, I think Felipe is spot on! I am very concerned about my cash on cash return. If an investor put up the down payment then your return is infinite. You also have to understand your appreciation rate. Is the property increasing in value? I take several aspects into account when purchasing a B&H 

Based on what you are showing I would want them to pay ME to take the property. The formula I think you are speaking of is using the Cap rate. You take your NOI and multiply it buy the cap rate to great a fair purchase price based on income.

The property has a NOI of $10k/yr Times Cape rate of 10 = $100,000 purchase price

From what you are showing here it seems like a no brainer. The Cape rate is over 16. Down here the average is 5. But, I think there may be some expenses that you did not include, maintenance and vacancy. I assume you are buying cash since there wasn't a mortgage payment listed.

Do you plan on improving the property when there is turnover to raise the rents? If so, you would have to consider the cost and the new income.

I would verify the rent rolls, utilities, and do a thorough inspection.

Aaron,

Being up north it is often a little harder to repipe a house unless there is a basement. I have done them down in FL but we run everything through the attic which makes it simple. When you say is there anything else to consider, are you speaking of the rehab on the whole or just the plumbing?

Thanks guys. I will reach out to you soon. I am excited about the opportunity.

Here are a few to try:

Owners.com

FSBO.com

forsalebyowner.com

Zillow.com

There's lost of them out there. It becomes difficult to search through them all but with persistence you will be able to find some motivated sellers. Understand that in the first 2 weeks of a FSBO they are called by multiple investors (typically a call center) and may be turned off by the term investor.

The rule of thumb is to always tale the seller financing. You want to get a good rate and good terms of course. The reason I say it is the rule of thumb is if you go to get traditional financing on another property your current property will not show up with a loan. It will make it easier for you to get financed. It is rare to get seller financing but banks are always there. Also, there are fees attached to the bank financing but not usulally with seller financing.