All Forum Posts by: Beth Teutschmann

@Christopher Phillips I hadn't come across it yet that you need 20-30% down for an investment property and that's exactly the kind of newbie mistake/assumption I was talking about needing to be aware of, thank you! And yes, would absolutely need to check it out to get an idea of rehab costs for sure, but I know sometimes people with more experience can look at a photo and say 'wow that's going to need at least 20k of work because of [xyz] I see in this photo,' which is something I wouldn't necessarily pick up on. 

@Brent Tice that is very helpful! getting the numbers from someone in the area already doing it is great and I'll definitely use that in future assessments. I wasn't actually expecting to find someone in the area right away haha. I had looked a bit for local real estate investing groups and whatnot and didn't find any, so was a bit surprised when someone local jumped in right away.

@Brent Tice oh hey, a local person! That's exactly the kind of feedback I was looking for in terms of, I wouldn't have thought of the 2 bedroom having a rent cap but that makes total sense. 

And good to know on the neighborhood for the triplex, I truthfully didn't know much about it but hadn't heard any big negatives like I have about some others. 

If you don't mind me asking (and just ignore if you're not comfortable) what kind of real estate investing do you do in the area?

@Christopher Phillips great, let's start there. I actually watched that video yesterday.

Here's where I stumble:

What are the best ways to come up with the numbers you don't have data for yet? Such as vacancy (BP says he estimates 5% generally based on his experience but I lack that experience as I'm a first time rental property owner), Repairs/ CapEx, and rehab budget.

So for example. I did the 4-square method and I got a cash on cash ROI of 54% given the numbers I plugged in for the Tiplex.

Now this seems too good to be true to me. Something in my estimates must be off. My question is where, and what SHOULD they be?

Here's what I put in:

Income (given in the property description): $1895

Expenses:
Taxes: $245
Insurance: $55
Lawn/Snow: $50
Vacancy $100
Repairs: $200
CapEx: $100
Mortgage: $750
Total: $1500

That gives a cash flow of $395/month or $4740 annually.

Cash on Cash ROI:
Down Payment: $4800 (given what I have now in the bank I could use to invest)
Closing Costs: $3000 (just went with what BP had in the video)
Rehab budget: $1000 (it looks like there's tenants already living in part of it it so I'm wondering how much could even be done right away, if much at all)
Total: $8,800

Divide it out and you get the ROI I stated above. So that brings me back to, what am I doing wrong? What assumptions am I making that are incorrect? What about the pictures of the houses indicates there will be a lot or very little rehab costs at the beginning (I am not good at estimating that stuff at all)? Certainly there's parts that need work, but I'm not good at knowing what's expensive and what's not, if that makes sense. 

What am I missing in the assessment that would change the numbers and in turn, change an investment decision? 

Again, I'm a total newbie so I am well aware there are plenty of things I'm visualizing incorrectly, which is why I'm here asking for help :)

Hey everyone! I am a total newbie at real estate investing. I've purchased 1 house, the house I live in. I have, however, a somewhat close relationship with the landlord I've rented from for the 8 years previous to buying my house, so somewhat familiar with the in's and out's and frustrations of rental properties.

I'm just getting my toes wet and listening to YouTube videos, podcasts, reading content on the site, etc. And thought maybe I would jump in with a couple properties that to me seem like they could be good deals, but obviously being a newb not really sure lol. 

There will be unknowns with both these properties, but I'm at the point where I don't even know what to look for (or am slowly learning) or what questions to ask if I did approach the current owner/realtor/etc., and I figured a great way to learn would be to just jump in with a couple example properties instead of using hypothetical properties.

House 1: https://www.redfin.com/WI/Eau-Claire/430-Ferry-St-...

Well-maintained tri-plex. Lower unit is 3 bedrooms; upper units 1 bedroom each. House and garage roof 4 years old. Large lot, almost one acre. Tenants need day before notice. Seller pays water & garbage for all units and heat & electric for Unit 2. Total rents $1,895. Details and images on link. Don't know much about this neighborhood in terms of quality, but as far as I know pretty average.

House 2: https://www.redfin.com/WI/Eau-Claire/862-E-Grand-A...

Foreclosure. East Hill home (which is a good neighborhood here, though this is the less-nice part of that neighborhood in terms of home quality) with hardwood floors, partially finished walkout basement and located within blocks of downtown Eau Claire and Parks. Details and images on link.

I picked the triplex because it's a multi-family home that lists what the current rental income is, and it's been on the market for 147 days so chances are the seller would be willing to accept a lower offer.

I picked the foreclosure because it was one of the few foreclosures in the area that had a price listed, and because of the low price (though obviously I know price does not equate cost). This would become a rental home as well.

Any insights on these? Yay or nay? Things to consider or anything with either property that stands out? Or under what circumstances/dollar point would they be a good deal?

Thank you for the time to anyone to takes a moment to look it over and respond, it's sincerely appreciated.