All Forum Posts by: Anthony Doukas

Devon,

I am very new to this, but when I was analyzing my area, I found there wasn't a good market for rent by the room as opposed to Chicago nearby where it is much more common. I know two people that don it without much headache, but they do have to manage personalities of their tenants sometimes. It seems like the trade off is usually higher gross rent, but it requires more management and sometimes more issues with tenant conflicts and parking. Also, be sure to check local laws to be sure it is even allowed. Sometimes there a strict limits about how many unrelated people can live together. Hope this helps and best of luck!!

Joe,

Thank you for the feedback! I was wondering if you have any suggestions for estimating repair costs on the initial analysis? I have read in a bigger pockets book about making a table to get a better number for CapEx, but repairs was always described as an estimate based on the age of the property and how much of the property has been recently updated. Thank you again and have a great week!!

Tony

I am analyzing 3 properties a day from the MLS. I was looking for a little feedback on my overall method for quickly screening property deals when trying to decide if I should do a deeper dive. I was especialy looking for feedback on quickly estimating expenses. This whole process takes about 15 min per property for me now that I have done it a bunch. Most properties on the MLS don't come close when using this process, but I have been told to expect that.

Verify Sale Price: Quick look at Zillow for what has sold that is similar in the last 3 - 6 months. 

Est. Mortgage: I run a quote from my broker through an app and 

Tax & Insurance: I pull tax data from the county website and run a quick insurance quote for those numbers

Est. Fair Martket Rent: I pull from the MLS listing and also look at some comps from Zillow that are up for rent at the time and are in similar condition

Prop Manager: I assume 11% total. 10% for month to month expense and 1% extra for added costs of getting a new renter in place. 

Repairs & CapEx: I have been told 5 - 15% is reasonable and I assume 10% almost always since I don't really know much.

Vacancy: I usually assume 8% which equates to 1 month vacant per year. Obviously going to work hard to make that much less. 

Lawn / Snow: I assume $100 / month for lanscaping generally. 

Water: If water is included, I usually assume $50 / unit. 

I also do a quick look at crime overview for the town (assuming it isn't a huge city) on the free version of neighborhood scout and the high school for the property. I also do a quick google search for starbucks and whole foods in the area for indicators of higher income. 

If after all this the prop cash flows $100 / month / door or more, has > 8 - 10% CoCRoI, and schools and crime are reasonable I put it in the que to do a deeper dive and possibly make an offer. 

Thank you in advance for your thoughts and feedback. 

Leah,

I am going through this process now. I feel like people often try to pick the tool and don't put as much thought into the system beforehand. For me, I knew I wanted a tool that would be as automated as possible, something standardized I could outsource eventually, and something that could track different "pots" of money within one account so I could track saved money for repairs, CapEx, vacancy, etc within one savings account and even break those savings out by property. I have been working with a bookkeeper to learn and set up QuickBooks online and it is going very well. Working through this now, I would say try to start with the end in mind and indentify your critical requirements before picking a tool. Also, if you can afford it, work with someone to help with the set up the system right the first time. Hope this helps and best of luck!!

Chicago/NWI REI Meetup

This facebook group has in person meetings toward the beginning of every month. The group is relatively new, but there are prob 20 people at every meeting.