All Forum Posts by: Arthur Banks

Thanks @Kyle Hipp I should've been more specific in my question. I'm asking more for those who live in the same unit as their tenant such as in an owner occ.

How do you handle rent collection? Knock on their door on the first? Have them put it in your mailbox right outside? Mail to your P.O. Box?

Yeah. Kinda what I was thinking. Boy do I hate going up those stairs with groceries. But it's the best move if tenants have little ones.

Thanks.

For those of you who owner occupy, do you prefer to live upstairs or downstairs? Do you find tenants with families prefer to live on the lower level or upper?

@Rob Anderson Thanks. I checked with the realtor, who also does PM, rentometer.com and some other sources. $1100 is median with $1150 average. And I did correct the taxes.

@Aaron Montague My calculated mortgage payment was spot on with your number. Yes, that is the loan amount I'm figuring as well.

They are split meters. I believe. Now you have me second guessing. I'll double check again. For me, that is a must have at this point in starting my investing career.

I figured out the $100 difference between your $1905.48 and the BP calculation of $1804.73 and ROI: 52.13% I stated the taxes were $6600. I was wrong (that was another property I was looking at) The taxes are $5751. With those taxes I'm coming up with $1834.48, $30 difference from your numbers but still pretty close.

Here are my corrected numbers. Sorry.

Mortgage: $535.48

Vacancy: $225

Cap Ex and Ops: $250

Insurance: $120

PM: $220

Taxes: $479.25

Total expenses: 1804.73

Total Revenue: $2,250

Cashflow/month: $445.27

Cashflow/year: $5343.25

So that being said, if these are pretty close numbers this should be a good deal.

I just confirmed with the lender the rate would be 5.125% today. So that would change the numbers, but for the sake of time I didn't change them above. But it looks like $1835.62 in expenses and $414.38 cashflow all else being equal.

@Aaron Montague I'm confused. What did I miss? How did my cash flow stated above not meet $100/door. It's a 2 unit with cash flow of $445 which includes 10% for PM. Wouldn't that be $222.50/door?

As stated in my first paragraph, all utilities are separate. Trash is not rolled into taxes.

As stated in my second to last sentence I used 5% interest rate. I don't know if that is low or high. I will look into that and recalculate.

Yes, taxes are ridiculous in this town.

If ALL utilities are paid by tenant, why would I calculate those expenses?

There is no HOA.

I see the difference in your $2070.48 and the $1804.73 that the BP calculator gave me is $265.75. You calculated sewer, water and trash at $175. Difference between those is $90.75. Are you saying I need to calculate those costs for times of vacancy or you just assumed those expenses are mine as owner?

Vacancy high at 10%? Are you basing that on MA vs IL, where I am? What is your 8% based on? B) Isn't it better to estimate that number higher than low? I estimated 10%.

I'm just totally missing how you arrived at $129.52/mo and me at $445.27/mo. That's a huge difference and I don't want to over look anything.

Thanks!

Looking at a 2 unit 3BD, 1BA, full shared basement that can be sectioned off for secure storage, 2 car garage, separate utilities that I am looking to owner occupy. It's a HUD property in which they are giving $3050 credit for possible mold repair. My concern is it's been on the market for 260 days today. Well more accurately, it's been on and off the market from pending sales with no price drop other than yesterday from $77K to $75K. Nice neighborhood, near elementary school, mix of SFR and 2 units on the street.

Here are the numbers rounded up using BP calculator, let me know if I'm missing any critical info to allow you to help.

Asking $75K

Down & closing: $10K

Taxes $6600 (rounded up)

Repairs: $30K (my rough estimate. Getting contractors out immediately)

ARV: $140K (most recent ARV comp $144K sold 8/1/2013, other sold are between $71K - $77K before repair)

Insurance: $120/mo (need to confirm with ins)

Vacancy: $225 (10%)

Repairs: $112.50

CapEx: $112.50

PM: $220 (although I'd manage until I acquire too many)

2% Rule: 2.05%

Rent: $2200 ($2250 if renting garage @ $25/mo each)

Monthly Expenses: $1805

Cashflow: $445 (w/PM)

Loan based on 5% interest rate

My plan is to use 203K with 5% down stay there for the year.

@Jeff Lubeski That's good to know.

Let me ask this, the place in question is Freddie Mac owned. Will they fix that?

@Jeff Lubeski I don't if that's a lot or not, but a lot less than what I was thinking. It seems like burst pipes aren't that uncommon. I've never personally experienced so I was rather concerned when I found the problem in this potential property.