All Forum Posts by: Chris Vail

@Andy Schwaderer Welcome to the site and thank you for your service.

Hopefully my son will be here by then which means my wife and I will not be, due date is the 23rd.  I will ketch everyone at the next one.

@Henry Le 

Usally it is a % of the rental price, and there are other fees in there as well to think about such as filling the unit with a tenant as well as others, someone with more experience might be able to shed some more light on this.  You can also google search / call up some local property management companies to get an idea of what they run as a cost structure.

I would say the deal looks very slim.

@Veronica Nwaki 

Any more info on the property?

Be patient first and foremost, I have been talking to my wife for 7 months now and she is still not "excited" about REI but she is becoming more and more open and willing to talk about the subject. The worst thing you can do is try and push the issue. Some good advice has already been given up above, just be patient.

I believe but am not 100% on this... If you are not getting the answers you want during the due diligence period it is your responsibility to act on that lack of information during that time. Once the due diligence period ends you can't reference time during the period that has passed and back out with out paying the price of late action.

@Brad Done 

look up J Scott on the forums I know he has some really good posts that have some spreadsheets attached for analysing property over the long haul.

@TAYLOR BRANNEN 

Another thing to take in account which your analysis does not is all of the daily, monthly, yearly, items that are involved with owning a rental property.  Alot of investors use what is called the 50% rule to account for all of these items.  It wroks in this way, take your gross rents and half it (50%) you can expect over the long term that you will average 50% of your rents in expenses not including your debt service.  So you have roughly 1100 in gross rents so over the long term you will average 50% in expenses (think turnover, new roof, new water heater, lawn care /yard maintance, property management (usally 10% of gross rents, I know you are planing on self managing but you need to account for this to see how the deal will work as an investment that you might some day not want to self manage), taxes, and about a 100 other miscelanious items) so 1100 x 50% = 550 in expenses on average, leaving you 550 to pay for debt service, anything left over after that will be your profit.  In the case of this property you are looking at negatvie cash flow so I would say pass.  

Now this 50% rule is a rule of thumb but there has been a lot of data collected over a lot of properties and this rule of thumb stays fairly true and is a quick way to see if the deal needs further analysis, in this case I would say no, but that is just my opinion.

@Dennis Lanni 

Any thoughts on how to approach something like this?

@James Peoples No it is on Caravaggio Cir