All Forum Posts by: Amir B.

@Amir B. it depends on a lot of factors...If I were you, I'd be asking myself these types of questions:

-Why did the first tenant stay for such a long time, but now you're having trouble finding a new tenant?  ...what do you need to do to find a new tenant? Tenant stayed a little over 5 years. School district. Kids were in school. Hire a PM company instead of leasing agent. 

-What grade is the neighborhood (if B or higher, I'd lean more to keeping it, if C or lower, I'd lean more toward selling it) B

-What type of tenants will this property attract, and how much of a headache will it be to manage?

Blue collar. Hmm I had one tenant but he was going to be a pain so we mutually agreed to end the lease. 

-What's your return on equity? (if you don't know, read up on this topic)

I don't know this but I will read up on it. 

-What's the forecast for appreciation in this area?

I bought it for $86,500 including closing costs and now zillow is estimating $164,000+. 

-What capex items do you anticipate in the relatively near term?

waterproofing, hot water tank was replaced last month.

-If you get a new tenant, what will the cashflow look like?

$772 with PM service

-If you sold it, what types of returns could you get on the new property you would buy?

$164,000-$86,500=$77,500 not including realtor fees, closing costs, capex, etc.
...and, the other items that others have mentioned in the thread are also great things to consider...as others have mentioned, it often doesn't make much financial sense to pay off an investment property if you have a low rate locked...but, you can't turn back time--so, try to educate yourself on that issue and learn from it so you can become a better investor in the future.

Yes, will educate myself on those topics. Still learning. I have a long way to go. 

Good luck out there!

@Amir B. - Overall a nice home but I agree with some of the others that interior looks dated. Maybe apply small cosmetic changes inside the house such as fresh coat of paint? Lots of wooden features to the interior so possibly explore updating the kitchen cabinets or the living room bar set with a fresh coat of paint? I think these small changes alone will attract an tenant or two.

What is it worth? What will you do with the $ from the sale? Need some more info.

Exactly what Joe said...respectfully. Use other people's $ to pay it off. Why did you pay it off?

Quote from @Amir B.:

Quote from @Joe Villeneuve:

Quote from @Amir B.:

Quote from @Joe Villeneuve:

Could you let me know why you paid it off?  You just paid the total price for the property.

Why are you concerned about the gross?  The gross doesn't matter.

 June of 2018. After buying the house, I used another $3,500 to fix it up for the renter. I meant I wanted to gross $5,000 monthly on top of my W-2 income ($13,000).

That still doesn't answer either of my questions.

 Sorry I don't understand.

Why did you pay off your property?  The more cash you spend on a property, the more you paid for that property.  100% equity means you paid full price for the property.

Why are you concerned about the gross profit?  The gross doesn't mean anything on its own.  What matters is the net profit/cash flow.  The only thing that matters is what you "keep".

Quote from @Amir B.:

You need to know the market. Zillow rent estimate is $1350. I did a search for 3bed/2bath priced $1000 - $1400 and got over 40 results. Some of them are trash, some are nice. Know your market and how you fit in it. IF you sit on the market for 2-3 weeks with no applications, you are over-priced and need to drop 5-10%. Rinse and repeat until you find someone.

Always lower your price, not your standards.

@Amir B. I say this with kindness and a sincere desires to see you succeed.  The interior of the house looks like early 1970s.  If possible I would spend $20K and update the interior.

@Amir B.

do you have a PM or do you self-manage?

have you considered lowering the rent to get more applicants?  vacancy utterly destroys cash flow and is much worse than even a significant reduction in rent.  do the math.

@Amir B. He's asking why would you pay the entire mortgage off when you didn't have to? You probably had an interest rate lower than inflation and your tenant was paying the mortgage for you. All you did was prepay about $75,000 for a couple extra hundred bucks of cash flow per month. The interest on that loan was a tax deduction. Always pay the minimum and buy more cash flowing assets with that remaining money. Storing money in the equity of a home is the last place you want your money.

And gross revenue is a weird way to look at things. If you have $5,000 gross rents, but your expenses are $5,200 do you care how much your gross is, or that you're paying an extra $200/month?