All Forum Posts by: A Schweda

Wow.. pretty steep prices. I have USA and use them for everything... I just got an umbrella quote for 1 mil coverage @ 24$/mo. I have one rental sfh, primary residence and 2 newer vehicles. I love the info about the A and C teams haha. That is really good to know.

Great responses, thank you. By breaking the lease they forfeit the security deposit.. which would be used to cover the next month typically? I told him I would return the rent, but keep the security deposit to cover the lost time.  The tenant is a college student, his uncle has trust from a workman's comp suit years ago. The trust stipulates it will pay for college and housing while attending college. The attorney told him everything was good to go, so he signed the lease. Turns out 2 days later, the attorney called and told him housing would only be covered if attending an out of state school. I feel bad for him, and really appreciate him letting me know right away.

Monday we had the lease signed and deposit and first month paid..2 days later the tenant called and said they would not be able to pay next month's rent?? And they would get their stuff out tomorrow... oook. So do I refund the first months rent and keep the deposit?

I somewhat understand the idea of tax lien investing.. but what about trying to buy the properties that have tax liens on them.. or are delinquent on their taxes? Does anyone have experience in using this information to target these properties for purchase from the owner?

So it turns out.. We did sign a lease with these tenants for one year. They did not pay in full up front, but will pay monthly. Just thought i would update. Although their intention of paying up front originally.. was because they were allocated living expenses out of a trust while they attended college. I would have taken a check for the full amount though :)

Hey thanks for the response.

HOA is included in the numbers, of $166/mo, as well as insurance, taxes and utilities.

Here are numbers with the 2.5% Capx and 2% maint. and 8% property management.

Annual Cash Flow $689 

Cash ROI 4.64%

Total ROI 7.37%

I do plan on managing this myself though. Numbers without PM:

Annual Cash Flow $2,533 

Cash ROI 17.06%

Total ROI 19.79%

I am looking to purchase a condo in a decent area, imo ( Phoenix AZ).

Currently it is on the auction site Hudzu.com. Currect bid is $42k. Asking price is $60k.

Here are the numbers based on a $50k purchase price:

Cost Assumptions Purchase Price $50,000

Improvements $2,000 ( Tear out 2 bedr carpet + paint + misc )

Closing Costs $2,848  Auction site fees of 4.5% plus $299 Doc.

Total Cost $54,848

Finance Amt $40,000

Downpayment Amt $10,000

Cash Outlay $14,848

Revenue Assumptions Monthly Rent $675 ( Average for complex )

Vacancy Rate 8%

Annual Cash Flow $3,233 

Cash ROI 21.77%

Total ROI 24.51%

Not that I am really experienced... but thought I would share my opinion anyway because I thought the same thing. After looking at various properties in Phoenix.. I thought the fact of chasing rent from people that could care less about paying would not be fun.. also to have the property appreciate.. the neighborhood would have to as well. It might be worth looking into better areas where you can actually make a little money safely. Just my thought.

Arizona law states you cannot require more than 1.5x rent as a security deposit. They can volunteer to pay more, which is fine according to the law. I have spoken with a PM friend who says everything is legit.. as long as you don't require more than that amount, and you hold the funds in reserve and take the monthly payments from the total amount. I have not received a check yet.. so the whole deal is still in limbo. But I will gladly take a 30k check without question. Never been one to turn money down.

I do appreciate the feedback from everyone. I cannot say i am an experienced landlord, but it seems renting the property to someone close to me knows, seems a better situation than renting to a random stranger. Also they are not friends of mine.. the mother is a family friend, not my friend ( Mother in law's friend). If we have to evict i could care less about the mother or daughters feelings. Business is business imo. If they do not have a negative background check, would it not be a better position than a random person passing a background check, and paying month to month?