All Forum Posts by: Account Closed

I agree with Jon. However, they will probably make you put $15k down at least, so now your payment with 5% interest would only be $1415, assuming you have a 720+ credit score.

Then figure $300 a month for insurance (due to your age with that car). And probably $500 a month in reserves for maintenance (tires clutch, oil changes etc)

However, if you took that money ($2215/month) and used it to purchase property. You could buy 2 properties per year with $12k down payment on each and cash flow $250+ per month. Now, do that for 5 years and you'll be making at least $2,500 a month off those properties (not counting rental increases). THEN, if you still feel the need to buy the car that would be a good time because now it pays for itself.

However, I'm guessing at that time seeing how much you can make in real estate you would probably keep driving the "Honda" so you can buy more properties (which is what I'm guessing 99% of the investors do on here).

Hi Shannon,

That sounds like a pretty good deal. The only thing to consider is how much your broker is going to help you with your offers. It might be a good idea to hang your license with a broker who will help you out a lot in the beginning, then move to a cheap broker after a year or two of learning (unless you already have a lot of experience with writing offers etc).

I was just in Chandler last week, I'm actually out there quite a bit for work and I'd love to do some real estate out there but I'm just not very familiar with the market unfortunately.

Good luck to you!

Chad

Just to clarify I am not a tax professional or licensed in anyway so these are merely my opinions. I'm not sure exactly what you mean "add in their mileage?" Add into the cost of the property to determine offer price, or add into the cost of the property to determine my actual cost of construction for a flip you already have?

For instance, if you are considering calculating it for your offer price I would say that it is not a large enough value to even consider it unless you are driving hundreds of miles each day or your resale value is going to be in the $20k range. For instance if the property is 50 miles away and you plan on going there twice a week for 2 months that would be $908 so on a $300k house it's not a big deal. Plus, I'm guessing most other guys aren't doing it so if you have competition on an offer it would hurt you more than help you.

If it's for determining actual construction costs you could either job expense it or call it "overhead." I'm guessing most flippers (unless they're a larger company) don't have the advanced systems in place to exactly separate out G&A, indirect, and direct expenses appropriately at this level.

However, if the mileage is directly related to that exact house (such as driving to the house, or going to Home Depot for supplies) then it is technically a direct expense. However, you would also have G&A mileage such as driving to your PO BOX, driving for dollars, driving to houses when putting in an offer etc.

The larger companies also will most likely be using the direct vehicle expense rules which allows them to directly expense or depreciate all vehicle expenses (if they are 100% company use). They would either keep a mileage log per job or they would calculate out the expenses for the year for all vehicles and distribute them per job based on dollar value of each job.

Hopefully that all makes sense. You can also look at Sage 300 Construction and Real Estate software if you're really interested. I just bought this for my full-time job and it's about $80k so you have to either be a large contractor or flip a TON of houses to use this.

Personally, I consider all mileage as part of my G&A expenses currently but that's because I'm small time and for tax reasons it doesn't make a difference.

There's two ways that I know of (at least in San Diego, which I think is the same for all California). You can either go down to the county recorder's office and they have public access computers and you can look up the owners. I've never tried to look up mailing addresses there but I'm guessing they'll have it.

The easiest way I know is if you have a good realtor you work with they should know how to use their Realist Tax Lookup service that is provided with MLS access. They can type in a name, address or APN and it will spit out the tax mailing address.

If your list is short (less than 50) I would be able to get that info for you and send it to you in excel. PM me if interested.

That $95k goes down quickly. About $20k to realtors plus any closing costs someone might want you to pay. If you're using hard money that could be a cost. Plus if you are getting the addition permitted that could take a while, inspections etc.

I'd put in $10k or $15k in holding costs during that time. So $95k is more like $60k conservatively which still sounds really good for California!

Thanks everyone! I think this answers my question: section 8 is probably not for me. I'd much rather have a nice property that stays nice and keeps its value (or goes up) than get a better cash flow every year.

Mike B. Thanks for the info!

Andy. The only reason this was so low was due to the building being 2008. Also just passed the section 8 inspection so nothing is needed at the moment. What do you suggest for repair cost per unit for this type?

Hi guys,

I'm looking at a deal in Chicago. It is a newer triplex (2008) at 1344 S. Karlov Ave in Chicago. The one caveat is that these are all section 8 tenants, which I have never done before. I know some people scare away as I've heard all the horror stories but I'm just looking at the numbers & the area.

Here are my numbers

Price: $189,000

Monthly Rent: $3682

Maintenance: $150/month

Management: $368/month

Taxes: $300/month (Don't know how accurate this is in the city of Chicago)

Insurance: $100/month

Landscaping: $100/month

Utilities: $300/month (owner pays water)

Total Expenses: $1318/month

Mortgage: $$859 (5.5% w/ 20% DP, 30yr)

NOI: $1,505/month

Cash on cash: 41% (assuming 3% closing costs).

Cap: 15.07%

GRM: 4.28

To me this seems great, but also too good to be true. Anyone know the area? Is this in a war zone?

Thanks!

John,

Flying is great. I currently get to do it for my day job sometimes but can't wait until I can fly for RE investing.

Rob,

Thanks! A few months ago I just logged my first few hours of turbine time in a King Air 200 ... only 497 more hours until I can be insured in one! haha

Karen, higher level personnel tend to spread out into nicer areas such as Carlsbad and Encinitas ... or purchase homes in Oceanside, Vista etc. Lower income personnel tend to stick closer to the base as rents are much cheaper such as north Oceanside, north Vista or Fallbrook (even Temecula). However, I do not see a lot of affect from the military in San Marcos, Escondido, south Vista, south Carlsbad and Encinitas.

As far as the other bases I'm not as familiar as to what areas are affected by them. There is a large military presence at Miramar and Coronado bases.

If Camp Pendleton starts shrinking the largest affect will be on the north area of Oceanside, whether near the beach or inland.