All Forum Posts by: Dan T.

My property in Memphis (Bartlett), TN was purchased from and is managed by REI Nation. Much of the reason i chose to purchase from REI was because it, at the time, was the only way to get into their management program that has near perfect review. I have purchased 4 properties this year, 3 being from REI (all 4 under their management), and the only calls i get are to check in and let me know all is good (even during a pandemic).

If you have any questions, feel free to reach out directly.

I think this year has shown that stocks are not always the wisest choice. Well, my 401K would tell you this. I chose this route as the property is being paid off by someone else so, in addition to my 8%/yr COC, i'm earning equity, possible appreciation and am able to depreciate my properties and not my stock portfolio.

I'm now invested far heavier in real estate than the stock market but, I am still diversified and well invested in both.

I wanted to report a couple thing on which i am constantly getting pinged in my DM's. I've not incurred any maintenance/expenses to date so i am not factoring any in. These numbers will, of course, change in time.

COC: 8%

Cash to Close per my HUD: $39,681.42

Monthly Deposit from Property Management including their fee: $935

Auto-Pay Mortgage, Impounded: $673.5

Yearly Net (no expenses included) / Cash = 0.0790

CAP Rate: 2%

Appraised value when purchased: $145,000

Yearly Cash Flow, No Expenses Included: $3,138.00

NOI/Value = .0216

I just added this to the first post but it appears BP screwed up my formatting.

Now that I have had this property for a bit, I wanted to report a couple thing on which i am constantly getting pinged in my DM's. I've not incurred any maintenance/expenses to date so i am not factoring any in. These numbers will, of course, change in time.

COC: 8%
Cash to Close per my HUD: $49,353.47
Monthly Deposit from Property Management including their fee: $1,165.00
Auto-Pay Mortgage, Impounded: $838.97
Yearly Net (no expenses included) / Cash = 0.0792

CAP Rate: 2%
Appraised value when purchased: $180,000
Yearly Cash Flow, No Expenses Included: $3,912.36
NOI/Value = .0217

I just put my 3rd property under contract with REI; this one in Moore, OK. Rick (my account rep) knows what I am looking for. By the time i get the property, i can pretty much guarantee it will meet my standards. Just be clear with them on the school district qualifier.

. Schools are as follows

Hello Vlad, School District has been a big part of my "qualifier". That's the reason my margins/cash on cash haven't been as great as others. I am more focused on quality of the property, area (heavy emphasis on schools) and thus, tenant. You can see the districts pulled from "great schools" ratings for my two REI properties, attached.

Both of my REI Properties are current - not exactly a "long term" review but we're rolling without issue! I'm actually in talks with them on my 3rd property.

Thanks for the reassurance, David. Glad to hear your positive experience as well. Now shopping for my 3rd property with REI.

Closing costs are part of any transaction. I elect to have a 3rd party inspection, some don't. Appraisals are normally wrapped into the closing costs added to the loan balance which is all factored into your net cash flow.

The whole point of REI Nation is that you shouldn't need a "big expense" budget within the first 10 years. They replace all CAPEX items to minimize this risk. That said, i start my account with $5,000 in it per property. Net cash flow is $350/month after expenses. Let's go 5% Maintenance, 5% Capex, 5% vacancy to get crazy. that's $195/month in the contingency account resulting in $155/m Net Cash flow.

As i will not be drawing this money, let's say i have a CAPEX issue in year 10, the auto-pilot account should have a balance of $42,000, $23,400.00 of which was dedicated to the above-mentioned "contingency" budget. Of course, this will not be the case as certainly SOMETHING will go wrong, there will be vacancies, etc. Worst case, the entirety of the $23,400 contingency allocation is subtracted from the $42,000.00 leaving a balance of $18,600.00 in the account + the $5,000 if not utilized.

I would still consider this a win given the balance in the account (approximately 10% of purchase price even if full budget was allocated) pl us equity pay-down and whatever appreciation the property sees. This does not appear "slim chance" to me... Correct me where my thinking is off; I was clear, this isn't what i do for a living so i am open to anyone that's willing to educate me!

Another Month, another Rent Check. My "Cash Flow" will be considered gross to most people, i am not withdrawing the money. These are investments to me so i have the rent Direct Deposited into an account specifically created for each property i start with a $5,000 balance. I am not withdrawing anything so there will be no allowance for vacancy, CAPEX, maintenance, etc. It's all going into the account to build.

$1,295 Rent

$129.50 MGMT

$838.97 Mortgage (impounded)

$326.53 Gross Cash Flow