All Forum Posts by: Chris Coleman

@Matthew Ferguson the question I would need to answer is what fuels the demand for rentals? The fact that there is not much appreciation can be okay, as long as you have healthy cash flow. But are there jobs in the area? Is it a good community for retirees? College towns?

I would want to know what is fueling the demand in rentals so that I can confirm that it’s not temporary or vulnerable to a downturn in whatever that fuel is.

@Pete Abilla

If your credit score and DTI qualify, then you can get 5 mortgages, even conventional, and close simultaneously. If you want to go portfolio or commercial, then you can definitely get a loan to cover all 5 properties, assuming they are cash flowing. You'll also need to show reserves.

@Ronak Kotecha if I understand what you’re describing correctly, so you’re saying you are losing almost $400 per month on this rental?

If that’s the case, then yes you should probably sell it and stop losing almost $4,800 a year.

You’ve already lost close to $10K in the last two years. And even if you refinanced into a 30 year mortgage, it still doesn’t seem that you would cash flow.

Unless you can raise rents and Refi into a 30 year term in order to have a healthy cash flow, then selling is probably your way to go.

@Chelsea Ludy go to real estate investing Meetups in your area and join REI Facebook groups. But be ready to also offer something of value, such as help finding properties, motivated sellers, marketing, etc.

@Jim Truman as @Aaron K. mentioned, look at the Schedule E and it’s pretty easy to setup an Excel sheet that matches the Schedule E. Then you can record your expenses there and it makes it easy for you and your CPA.

Regarding startup costs versus expenses, there are plenty of articles you can find on the subject with a google search. But I also suggest keeping a list of those that you’re questioning and asking your CPA specifically about those. Make sure you’re using a CPA with real estate experience.

@Ryan Lepage forgive my last reply...I misread your description and I see now you said it’s in a “not great” neighborhood. Sorry about that.

In that case, stay away. And look for middle-class property in working class neighborhood.

@Ryan Lepage you’re saying the cheaper property is in a great neighborhood. So if it’s a great neighborhood, you can charge market rents for that neighborhood, and you can screen and qualify the tenants, then why would the risk be high of getting low quality tenants?

If it’s a low end property in a poor neighborhood with lower end rents, then yes, you’re going to attract lower quality tenants, potentially high turnover, and it’s not worth it. But if it’s a “great neighborhood” then you should be able to charge market rents for that neighborhood which should attract a better tenant.

@Alex Ferguson you can split the profits based on however the two of you agree. If you want to keep it simple, consider that he put up all the monetary capital and you’re putting in all the sweat equity, then you could decide what percentage each is worth and split that way. Also consider the holding period and exit strategy. Will your split be the same during the holding period and upon exit?

@Brad Moore have you tried getting conventional financing in your own name? 75-80% LTV for 30 years? Your cash flow will better with this.

@Adam Briley is the duplex Class A property or Class B or C? The new construction is Class A, so if your duplex is Class B or C, then you shouldn’t be trying to compete with Class A for tenants and rents. Different tenants. If you’re having to compete against Class A properties with a Class B or C rental and can’t be flexible on rent, then it’s probably not a great deal.