All Forum Posts by: Charlie Anne

@Tchaka Owen possibly! I have an estimate of $8-10k for repairs but I threw an extra $2k on there for surprises. Thanks for the feedback!

Hello,

I'm trying to buy my first rental property and I'm not sure if I am using the right Capex & Repairs rate.

I have seen estimates that range from 10% to 30%.

The house I'm interested in purchasing is a 3 bedroom 2 bathroom SFH. The purchase price would be $118k with $12k of repairs for a total of $130k. The ARV would be $160-170k.

The house was built in 1979, so it is an older house. I used a Capex & Repairs rate of 15%. At this rate the deal works. But if it should be 20-30% then it's no longer a deal. However there is $30-40k in instant equity which I'm not sure how to account for.

What do you think? Should CapEx & Repairs be higher? Does anyone have ranch SFHs from the late 1970s? I'm curious what rates you use. The location is in Georgia.

Same for me. Where can I find the old calculator?

@Mark S. do you mind sharing the turn key provider you’re using? 

I live in NYC and I do think there will be a huge impact. Young families will probably move right to the suburbs whereas they may have raised kids in the city otherwise. A lot of my friends have been “thinking” of moving away from the city for years but never made the change. This is now a catalyst for them to finally have the courage to try living somewhere new.

About half of my friends are looking to move in the fall. That’s probably not the norm, but I think there will be major shifts in the fall & another after the holidays. Many companies are being vague about their policies still, so people are waiting to find out what their options are for remote work long term. 

Thanks for the feedback!

@Anna Laud no, I don’t do this full time. I am looking for my first rental property. 

@Account Closed that’s a good point. I have recently discovered Camden NJ is fairly affordable and less than 1 hour drive from where I’m hiding out during COVID (normally I’m in NYC). 

All great advice... thank you!

@Anna Laud

I agree this deal doesn’t make sense. I’m just eager to find something. 

What’s your favorite area for 1% houses? And are they turnkey? I typically only find 1% homes when they need some work. I think I may need to check out some new areas.

I have found a duplex I'm considering making an offer on. I'd like some advice on my deal analysis - am I missing anything?

It's a 1910 victorian style home with new HVACs in each unit, new windows & new floors. I'm unclear on the condition of the roof, pipes & electrical at the moment, but building in 10% for capex & 10% for repairs.

Listing Price: $128,000

Rent Income: $1,290

Costs

• Mortgage: $520
• Insurance: $75
  
• Property Manager: $90
  
• Vacancy 8%: 103
  
• Capex 10%: $130
  
• Repairs 10%: $130
  
• Property Taxes: $30
• Water/Sewer: $60
  
• Lawn Care: Tenants
  
• Garbage: Tenants
  
• Total Costs: $1,138
• Estimated Cashflow: $152

This is low cashflow for a duplex, but I'm considering it for 2 reasons:

1) The market is appreciating at 8% YoY

2) I think rent can be raised by $100 on each side. If that's the case in 1 year it could be cash flowing for $352 which is closer to the $200 per door goal. Additionally, water costs could be transferred to the tenants as well for a total cashflow of $152 + $200 + $60 = $412.

What I like about this duplex:

• In the up & coming part of town
• Rent ready with 2 tenants in place
• Very cheap property taxes
• High appreciation 

What I don't like about this duplex:

• It's from 1910 which worries me regarding repairs
• It's by a river (but not in the flood zone)
• The neighborhood has some nice homes & some run down homes

I'd appreciate any input!