All Forum Posts by: Daniel Peavey

Well, she probably has Investors with Millions!!  I’m from Boston, the average guy can’t buy RE in these Cities.  I’m in Atlanta now.  Atlanta, Indy, Ohio, etc are RE potential for the average guy!

Oh, I forgot, Bigger Pockets has forgot that!!  I should write book about that!  
Still love BP though ! 😎

What world are you living in??

Thank you Kim!!  Good advice!

When evicting a tenant, and they have 2 vehicles and trailers in yard, that don’t run, what is procedure to get rid of trucks and trailer?  Can I sell?  Can I have them towed?  Is there a time frame?  Thanks

Joe, so the Cares Act prohibits tenant evictions??  If so, how long? What’s the time duration?

Can you evict tenants amidst this cares act? I read where you could not evict on tenants, if it was section 8, HUD, or some other federally backed loan!
Can you evict if property is owned privately, or if loan is conventional?

Collin, 

That’s brilliant breakdown of Capital verses expenses!!  Gives so much understanding!  One thing I gain from your breakdown is cash on cash , over years can significantly be reduced, if the ratio of rising rents versus expenses and capital improvements are out of control!!

I wish I knew this 10 years ago and tracked all this better. 

Thanks

Great point!  So, I purchased property for 25k, my Noi was 7k.  So, my Cap Rate was actually 28%.  The appreciated value of 95k, will have a new effective cap rate with new buyer.  Is this correct?

My other thought is this.  If I have a 28% cap rate, I divide that into a hundred, so, 100/28=3.5 yr

Every year I’m regaining 28% of the value of original purchase price of 25k, or in effect, the full value of the 25k will be repaid in 3.5 years

Is that correct thinking? 
Thanks

No!  You were not confused, you were spot on!  I paid 25k for property in 2010. My rent was 750.00, 9k gross.  Net about 7k

So my ROI was about 28%
Capital costs were 25 k

Cash on cash was 7k/50k = 14%

My rent now is 950/mo so I assume that would raise cash on cash to about 18 %

Your great teacher!!

Also, you answered another question in your 3 year example!! That’s awesome!! Thank you so much

question?  Owning this property for 10 years now, assuming over 10 year period, I’ve spent 20k!!  Do I add that 20k to 50k for a total of 70k??  That would reduce my cash on cash !!  I presume it is compensated if I raise my rent, to hypothetically 1100 per month!

If true, the cash on cash would be a variable, resulting from cost of expenses or rise in rents, or of course, both!!!

Is this right thinking?

Thanks

Collin, 

Thanks! Great info! In same example, would my Return on Investment, be the 9k divided by 25k? Would the capital costs of 25k NOT be included in the original acquisition? Hence, a difference in cash on cash return versus ROI?