All Forum Posts by: Alan Russell

Amie,

I think the short answer is "it depends". For instance here in North Carolina they reappraise properties once every eight years so this kind of jump could occur and would really have nothing at all to do with repairs or purchase price.

Evan, what exactly the investment model I have landed on for myself. The only caveats are that I would make sure you understand and include the financing costs as part of the cost for the property. When I finish my current project I am planning on paying for an appraisal before I seek bank financing. I plan to pull out 80% of the ARV as long as it leaves me with a positive cash flow of at least $100 per month after expenses.

My thoughts are I can get some of the benefits of "flipping" (quick cash out) with out the tax repercussions because I am putting it on the market as a rental.

The only question I am still researching is if I can write off the "Repair costs" in the same year because its a rental or if I will have to depreciate it over time.

Ok I know I am really new however, I see quite a few people on here that appear to assume that since this is a short sale the banks are currently collecting any payments. Just want to mention that this isn't necessarily the case. I had a niece that sold her house on a short sale and was never late on the mortgage. Probably would have been if the bank would have rejected the short sale though.

Thanks again to everyone that responded. As I said I am very new to this however, some additional information I have gathered since last night is.....

Apts are total elect however, tenants are paying electrical bills (in next door units). All four units are currently vacant however there are six identical buildings on this street and other than the 4 units in this bulding (it is bank owned) there is only one other unit that is not rented currently. It is about 4 minutes from a military base which I think is a pretty good location for this type of rental.

Susan - I agree with you about the vacancy rate and management fees and I have recalculated this one step further with 5% maintenance costs and I still get a cash flow of $499 Per month. I am working with my realtor not to try to tie this property up till I can do an inspection and due dillegience

Guys thanks for all the quick replies....some one asked about the $450 Insurance per month.

Also had a little type in there for insurance should have been $150 / month (not $450 so that would actually make it $1800 per year...guess my fingers were moving faster than my brain.

However these units are separately metered so no unexpected expenses that way

Thanks for all the advice and help

I am a very new member and have found a quadraplex that I may be interested in. This is a homepath +Renovation property

Tax Appraisal Value $165000

List Price $104,000

5% down required $4880

Unit next door (same design) apartments rent for $500 each

Mortgage Payment at 5.5% x 30 Years = 537.54

Property Taxes = 228.14 per month

Insurance $450.00 per month

5% for maintenance $100.00 per month

My calculations leave a monthly cash flow of $928.00

If I use the 50% rule (and I am calculating it correctly) I have a cash flow of $439.00

I am assuming that I can renovate this property for $10,000ish and it appears that there is currently tenants in at least 2 of the units (havent confirmed this yet).

guys this is kinda scary cause it appears to good to be true....

I am very new to this stuff however, I think I would explain that this is a business purchase first and that even after the repairs you would need to be able to show a profit when you resell. Additionally I would try to explain that even though the "estimated" cost of repair is about 25K, when the work actually starts there may very well be other costs that would surface that you can not currently account for.

I have not done this on investments however, I just closed a home with only myself on the mortgage (wife doesn't work) and the wife was placed on the deed at closing. I would think you could just say you wanted your dad on the title and but you will be have sole responsibility for the mortgage. I could be wrong but I don't see why the bank would really care about your dad being on the title.