All Forum Posts by: Bradley Benski

@Tom Lafferty 

Can you explain what you mean by "Maintain about 85% economic loss for the next 5 years."?

I don't understand what you are saying/implying by that statement.

@Thomas Fosnaugh 

So I ran your numbers through my spreadsheet estimating 10% vacancy, $50 month laundry income, 10% Management, 5% Maint, and 5% CapEx reserve and get $1166 per month expenses before the mortgage payment giving an NOI of $774. If I don't assume any of the Management, Maint and CapEx then I get your numbers. That extra $420 a month in assumptions (which brings your expenses to about 60% of Gross Rents) brings the cashflow of your proposal to $140 per month.

In your assumptions you mentioned about snow removal and lawn care, yet haven't included any consideration for it in your financial analysis.  These are typical expenses that you should include as well as property management, even if you are planning on doing it yourself.

Also, you are only planning on 20% down, for commercial loans many times you have to put 25% down. Don't forget to include some closing cost assumptions to figure your cash at close requirements. These are important when figuring Cap Rate and COC. Do you have financing lined up already?

Bigger Pockets has spreadsheets you can download from the Resources tab or you can use the Rental Property Analysis form as well.  I'd advise downloading 3 of the spreadsheets so you can see what things other people are including in their analysis.

@Adam Haman 

Congratulations on your accomplishments!

From my experience it sounds like you are wanting a change of careers not a "retirement".  I'd say go for it!  Find what you like to do and do it.

At your age you are too young to retire.  When I was at that age I had the opportunity to do "nothing" for 6 months, and another friend could do "nothing" for 2 years.  You can only play golf everyday for about 2 weeks before going crazy!  Same with hanging out at the lake, anything more than a week and boom, get me out of here.

Get down there and look for yourself.  I grew up in the area and was just down there visiting friends in May/June.

Alot is going to depend on the area that the property is in.  I don't invest there currently and for the most part wouldn't consider investing (in Pt. Arthur) there except maybe for a small part defined as a square between hwy 347, Hwy 73, Hwy 69 and FM 365.  But I could be wrong and your criteria might not match mine.

If you really want a frightening picture just head to the city hall in downtown :-)  In my opinion it's like some of the worst parts of Oak Cliff and the Fair Park area if that can draw a comparison for you.

this New Construction thread from @Joshua Dorkin is a compilation of posts related to J Scott doing a spec build in the Atlanta area.  I think it has just the answers you are looking for.  After reading it myself you definately need the expeditor.....

If you don't take into account maintenance, property management, or CapEx reserves, then yes, it would appear that the 50% rule doesn't apply as Taxes and Insurance are just a small part of the monthly expenses. My experience is to have one medium ($400-500) maint amount about every two years. Then the CapEx expenses such as A/C, Heater, Water Heater about once every 5 years. However, I'm in a partnership owning a tax foreclosure property and it's maintenance expenses at the moment are running about 50% of rents.

I think it's good to consider the 50% rule to understand if a deal can be a good one. But I ultimately try to determine what my actual expenses (with assumptions for maint, and CapEx) are and use that as my final determination.

If both are good and you really have no preference, you can pick the one whose application you received first.   The it's a matter of explaining that the early bird got the worm.

@Brandon Sturgill 

I believe you start the conversation on seller financing by asking what he's going to do with the money.  Then you add "Would you like to get a little more money?"  followed by "Would you offer financing  where I pay you every month..."

This BiggerPockets Podcast 77 discusses this towards the end of the podcast and 

@Jonatan Jatombliansky 

The key thing I'd advise is not to just blindly copy and paste someone elses words.  You need to compose your own words and story and know it cold so that you can discuss and debate it in depth.  This shows a level of committment and drive vs.  "Well that is what was on this Business Plan on the internet that somebody else used to get a deal."

@Chad Benedict 

Here is a link to a post that mentions alot of the REIAs around the Dallas Area

Dallas Area REIAs