All Forum Posts by: Aaron Howell

@Bill Thompson you're in the right place.  Learn as much as you can for as long as you can.

My first investment was my personal residence in 2006.  Condo, owner occupant only.  Just sold it last summer for $50K less than I paid for it.  I wasn't underwater and I got a small check at closing but overall it was an expensive education.

Since then I've done much better.  Everything has appreciated well and everything is cash flowing.

@Garrett Pickering I think your plan is a sound one.  You're in the right place for learning and I believe that getting your real estate license would give you the basics of a university degree for a fraction of the cost.

 @Neal Collins I'm not sure about occupancy.  I think Full Occupancy would have netted around $38,000

The owner has owned the property for 25 years and I'm guessing managed it himself and gotten too "chummy" with the tenants never raising rents to market.  I'd say its cash flowing for him b/c the principle has been paid down a lot.

@Anthony Dooley good insight.  I never thought of the bank not wanting to finance it because of it being so poorly ran now.  The master lease is a great idea.  

at $150,000 you'd have to factor in utilities, taxes, maintenance, insurance as well so and deduct from total income of $33,000 so the NOI would be around $10,700 and then you have debt service at $9300 so $1200 cashflow if everything goes well.

If you push rents to market and get $5200 a month in rents then its NOI goes to around $32,300 which becomes a screaming good deal with a 21.5 Cap and 65%COC.

Monthly rents are $3300 if 100% occupancy.

I'm looking at a 8 unit at a $270,000 price.  Income is about $33,000 per year, expenses are about $30,000.  Market rents are $250-300/month under market for the area so basically the owner shows a small loss on their Schedule E with depreciation.

Pushing the rents to market rate would make the deal a great one in the long run but what do you offer on the property now ?  The Cap rate in the area is around an 8 cap so using that I should offer $68,000 so that's not realistic.

No problem at all.  Glad to help

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