All Forum Posts by: Account Closed

@Ryan VandeVelde I'm a new investor, same as you just practicing analyzing some deals. 

I looked at your numbers and 12.5% return sounds ok. Athough I've been looking at stocks as well as real estate and one thing I noticed when I analyze deals is  the difference when you factor in Income tax (Not property tax) (I'm in Ireland so this could be different in the U.S)  

Here we pay 20% tax (Depending on Income could be 40%) on Income from rentals minus expenses NOT including P&I. This can have massive effect on cash flow, let's say:

Total Income:                                $900
Expenses (not inc. mortgage):     $451.43
Taxable Income:                      $450
20% Tax:                                 $90

(There is a tax relief on mortgage interest of up to 75%, for simplicity I did not factor this in)

Total Expenses:                       $687
Monthly Cashflow:                   $212- $90  = $122
Annual Cash Flow:                   $1,464

Total Cash Flow after 10Years $14,640       (nearly $11,000 difference) 

Profit on sale (not inc. tax) $16,370

Total Profit:           $31,010 after 10 years

The same amount of money in a stock that pays a 5.6% (tax-free) dividend compounded would be worth $58,630 (not accounting for appreciation) 

Profit: $24,630 

Buying, renovating and selling a house seems like a lot of extra work for $638 a year. 

Would like to hear other peoples opinions on this? 

@Jason Malabute the clearer your goals are the better. If you can define clear daily action steps that will lead to you accomplishing your goal it will make a massive difference in moving you towards your goals. (Not something you will get right immediately, I often find when I start a new project - what I think I should do, and what I actually need to do to get results takes some trial and error. I always find the better I plan my day the more I will get done) 

A great book to read is "The One Thing - Gary Keller". It will give you an excellent perspective on planning and goal setting. I have abc of real estate investing in my amazon cart, is it good? 

@Susan Farmer Sounds like a waste of 25K to me, why not put that money towards first flip that way you have a 25,000 budget for mistakes. If you loose it while doing an actual flip the value of the actual experience will be worth 10fold from what you get at any seminar. 

My opinion:  

J Scott  "Book on flipping houses" + 25K allowance for mistakes + Experience = Much greater value than any seminar 

@Johnny Makin congratulations on your first flip. In my opinion it depends on your situation,  if you buy a rental and your income from flips dry up can you afford to keep current on both payments? If you can find a rental that covers all your payments it could work out nicely. 

Hi @Jason Malabute , thanks for sharing your goals. You could be more specific with what daily actions you plan to take, for example: how do you plan to decide what is a good investment area do? 

Also, look over your list and decide what is the most important action you can take to achieve your main goal. I spent months reading over legal documents and doing tasks that had little impact on actually finding deals. 

Anyway, best of luck and keep us updataed.  

By the way, what audiobook you listening to? 

@Hugo Salgado It depends on your situation. If you have a low budget and some time on your hands you can use Wordpress to design your own website. It doesn't require much technical knowledge, just some patience and willingness to learn. If you have some money you can hire people to do it for you anywhere from $100 to $1,500 depending on what you need and what company you use. 

@Jason W. Hi Wen, Just because the property is cheap compared to others in the area doesn't make it a wise investment. Speculation should be an added bonus but not something to rely on. Is there a reason why the property is the cheapest in the community? are repairs needed? If so what is the ARV?

I'm a novice as well so my opinion might not be the best to rely on. If the property has potential for a quick flip it might be worth considering. I've spent the past few weeks analysing deals and noticed there are a lot of "hidden Costs" that can quickly turn a 1% Coc into a negative cash flow

I agree with @Aaron Norris  if it dosn't work in your favor can you risk holding the property long term and the costs that go with that? 

@Chris Drury @Harlan Cox under tools in the menu go to FilePlace, you will see a link for contracts. 

@Ryan W. Have you looked at any Skip Trace companies? I've heard heard people using sites like spokeo and TLO. I'm not sure if it will provide a forward address but you might be able to get a phone number. 

@Mike 

@Account Closed Under Tools in the Menu go to FilePlace and you will find a link for contracts.