All Forum Posts by: Cooper B.

I use xactimate extensively in my day job. J Scott is correct about the retail costs. Basically it will give you the cost to call up a big general contracting firm and have them take care of everything; this will be significantly higher than finding a smaller independent contractor or handyman.

For instance, in the above example for the garbage disposal, that $400 price likely includes a base fee for both a plumber and an electrician to do the disposal. But of course the job is so simple that it doesn't really require either a licensed plumber or a licensed electrician, much less both of them.

However, it is really impressive software and can be useful for an investors purposes. For example, you can use the labor and materials pricing to get a pretty good idea of what materials will cost for a job. In general, it is more accurate as the size/scope of the job increases. Smaller jobs can be very skewed.

Thanks for the detailed response Mike H. I have been under the impression that in general MFH will give better returns than single family. Do you find that the opposite is true? Or, do you find that there are just more of the really great deals to be had in SFHs?

In terms of my stated goal, the idea is to get the greatest cash return on my investment, and so much of that will depend on leveraging that cash. After considering your scenario, it seems like SFH investing will do a better job of this as I can hopefully get longer term loans at lower interest rates.

I think a good middle ground may be to seek out 2-4 unit buildings to kind of get the advantage of the economy of scale benefit of MFH and the better financing available for SFH.

The disadvantage of course is that it will take more of these smaller properties to reach my goal than just finding 1 nice $600k apartment building.

June 2010 - March 2011 I received a total of 3 months rent.
April 2011 - May 2012 I received 0.
June 2012 - present I am collecting rent.

The 3 months worth of rent at the beginning were paid in cash by a roommate. One of the bedrooms was mine but I wasn't staying there because I was working out of town. So it wasn't really a rental yet, it was my residence and somebody was renting a room. All utilities were in my own name and I was not living permanently anywhere else. I hope this makes sense Steven Hamilton II.

Thanks for the reply Jon Holdman. I did not mean that I hope to only spend a few hours a week to make this happen; I only meant that after this income stream/streams are in place I would like to only spend a few hours/week maintaining it (i.e., property management, paying bills, etc). I posted a revision at the end of the original post to clarify.

I am acutely aware that it will not be easy and will require a great deal of time and effort before I reach that goal.

Thanks J Scott for the encouragement. I too have seen deals with very good cash on cash returns by using leverage. I am trending towards MFH since it seems so much simpler to get 1 great deal than a bunch....not that either option is all that simple. By the way, I really enjoy your website. I believe the house you are referring to is the one in Austell? Birmingham is not so different in that there are also outer suburbs which are safe, relatively new, and fairly cheap.

No, obviously I am not joking Stephen Masek. I didn't mean to offend you with my question, but I am being honest with my goal and trying to put my money to intentional use. If it were easily within reach then it wouldn't be much of a goal worth aspiring to. That's my opinion at least. There are many stories and examples of people getting 20+% return on the right investment. Or, like I said, maybe it will take several steps to ultimately achieve that residual income.

Well I moved in with her December 2011, but did not receive rent until June 2012. I did receive about a total of 3 months rent between july 2010 and march 2011. From March 2011 until June 2012 it was being worked on.

Well, I did not use an accountant and I didn't keep up with the cash expenses well because I thought it would be my personal residence so I would be exempt from the cap gains anyway.

I didn't repay it the first year as it was still technically my primary residence (I was living out of town in a hotel, so this house was more of a permanent residence for me than anywhere else, even if I wasn't fully moved in). Honestly I only ever received about 3 months of rent up until this past summer because it was either empty or I had a non-paying tenant.

Hi all,

I recently read a post on the BP blog about the importance of having a defined goal for your investment strategy. So, I thought I might share my goal and see what ideas other investors might have for accomplishing that goal in my situation.

So here is my goal. I would like to use about $150k cash to generate $3k in passive positive monthly cash flow.. The time frame for this goal is 12 months. This would cover our mortgage and student loan payment. After that, I will move on to bigger and better goals. I realize that this is a 24% COC return, so it may take me multiple "steps" to get to the $3k mark. Passive does not have to mean fully hands off, but let's say a few hours/week on average at most.

I am asking for ideas, but I should mention up front the things I am just not interested in for this goal. I like to flip, but that is not steady income nor is it passive. I am not interested in section 8 or other bad-part-of-town investing; it is just not for me. I do not want to wholesale. And, I do not want to invest out of my town (Birmingham, AL) although I might consider Atlanta or Nashville as I am familiar with them.

In addition to the cash, I have a fair amount of time to invest right now (approx 20 hours/week). I have good credit and good debt/income, but do not have any experience buying investment property on credit so I'm not sure what the banks will think of me. I am very handy and can do a lot of repairs/improvements myself, and I know some good contractors.

I am leaning heavily towards investing in a multifamily property in the $500k range. This would be a property to which I can add value and increase rents and/or occupancy quickly. Additionally, 1 building is easier to manage and account for than a bunch of SFHs.

Other strategies that I would consider would be buy/fix/rent SFH, private lending, small commercial property investing, storage units. Any other ideas are welcome.

There is so much experience here on BP, so I would love to get any critiques to my plan or advice about other strategies that I should consider keeping in mind the goal stated above, the current markets, my level of experience and knowledge, etc. Any advice at all is appreciated!

About 2.5 years ago I purchased my first home and took advantage of the first time home buyer tax credit. The terms of the tax credit required that I live in the house as my primary residence for a period of 3 years.

Well, before I ever even moved in I got called out of town for my job. It was a long-term assignment so I ended up renting the house out so it wouldn't sit empty. When the tenant finally left (after I filed for eviction), the house was an absolute wreck. Since I couldn't move in before it was repaired, it sat unoccupied while I made repairs as well as all of the improvements I had planned on making.

In the mean time I got married. My wife had also received the first time home buyer tax credit, and I moved into her house. So when I finished repairs/upgrades to my own house I rented it out once again.

So I am now about 6 months from my 3 years being up. I believe that I need to pay back the tax credit since the house clearly is not my primary residence, but I am struggling to figure out the best way in which to do this.

I don't know all of the rules for this, but would it be possible to amend my 2010 return to pay back the credit then (basically as soon as I got it?). Then I could claim depreciation for half of 2010 and all of 2011 and 2012 which would help offset the repayment. Could I also deduct costs associated with repairs? Improvements? How about the loss incurred with a non-paying tenant? Add to this I have less than perfect records of what was spent on repairs and improvements. I did much of the labor but I hired some close friends as well and just paid them cash for their time.

It all seems very complicated and I'm not sure if it is worth the effort, or the expense of my accountant's time. (I'd value the house, not including the land, at $100k for depreciation purposes.)

Does anyone have any advice regarding this matter?

Welcome Tyler. I am also here in Birmingham. I think that real estate investing can be successful nearly anywhere given the right strategy. Birmingham is a great market if you ask me.

You might be interested in the local real estate investment club: http://www.aiaclub.com/

Good luck!