All Forum Posts by: Bryan Cork

@John Vu

I’ve been really working at understanding and applying the metrics used in investing for a while now and I feel like I’m wrapping my head around them a bit. Let me give you my 2 cents.

1. 2% rule = great for quick assessments, no expenses accounted for, so tough for condos/townhomes.

2. CoC = this is what I like to use when running a BRRRR deal. Basically what is my return on money I'm LEAVING in the deal. I don't find it useful for analyzing several 20% down deals.

3. CAP rate = this is what I would suggest you look at for judging property A vs property B. Assuming your down payment %, and loan % are the same, you are really asking "which property performs better?" Income- expenses / purchase price is the way to go IMO.

@Meridith Om

Unfortunately one of the problems is the location of the property. I know this city well and that is one of the areas that I just would not buy in. I think $850 for a 2 bed might be above market. At that price you are competing with a lot of other neighborhoods that are just flat out nicer. Sorry to be the bearer of bad news. However, spending some money to make your property more attractive overall WILL help. Good luck

@Ryan Pozzi

I’m in the process of turning a paid for single family rental in to higher cash flowing townhomes. So if your desire is to

1. Have more than 1 property

2. Maximize your roi from the pile of cash you have

3. Set yourself up to have possibly 100% tax free income from those properties and potentially shelter some of the income from your wife’s business. Using leverage is the way to go.

One thing that pushed me into doing this myself is for tax purposes. Just run your own numbers on this, but for me with 1 property I had net profit of around 11k per year, I was depreciating that property by around 5k per year. So I paid income tax on 6k.

However with multiple properties I’m going to push my net income to 14-15k per year and depreciate almost 30k per year. That means no income tax paid on my rental income, and the leftover is taken as a passive loss against my W-2 income.

So my advice is to go slow, and learn your market really well. And look to implement the BRRRR strategy as much as possible. Having capital puts you ahead of the game. Use it wisely. Good luck!

@Bill S. thanks for the info. My hope is to gather some information and if it looks like they might have some liability (property A) I want to have a discussion with them about helping with the cost of mitigation. For example paying to extend the pipe through my property out to the street. The culvert was probably installed by the homeowner but I can’t know for sure. Regarding the permit, would that be through the regional building department like other permits? Because I just looked there and all that is against that address is the final build.

Legal question: if property A is uphill from property B, and Property A has a culvert type of system that feeds into a pipe and dumps storm runoff into property B and that runoff is causing erosion issues for property B is Property A liable to rectify the problem in any way?

Property B is a 4 plex and I am one off the owners. This is in Colorado, and property A was built in 1997, and property B was built in 2001. So I don’t know if the culvert/pipe system existed before or after property B was constructed. Thank you!

@Phil Falcini I have started using Susan Wilklow, her firm is near Academy and Union. She has been extremely helpful so far. Good luck

How do you make sure this doesn’t actually happen to you? Before investing in a property with a HOA what criteria should you look at to determine the health and stability of the HOA? And how forthcoming is a management company going to be to someone not currently an owner in the HOA? Thanks in advance for the info!

@Dustin Beam Thanks for the reply. But I’m looking for some specifics......I agree though, if they don’t take pride in the aesthetics of the property then that’s a major red flag!

I’m looking to purchase a handful of townhomes in 2019. And wisdom tells me that I better do some homework on the HOA’s that I buy into, because they could turn a cash flowing property into a nightmare real quick. So, what are the major questions I should get answers to? Deficits, reserves, litigation, owner occupancy rate? Thanks!

@Roanna R. Yes, it has worked out great. I recommend them for sure 👍🏼