All Forum Posts by: Ibn Abney

@J.V. Paul ARV would help and/or local cap rates.

Property #3 you are not factoring in Main/Vacancy cost. Also, in my opinion $75 a month is too low of a reserve. I like to factor in 10%-15% of rental income. Don't lump Mortgage and taxes/insurance together. the Mortgage is a financing cost and taxes are fixed cost. 

Deal Analysis	#1	#2	#3
Purchase	$140,000	$160,000	$65,000
Down PMT	$35,000	$40,000	$19,500
Rehab	$10,000	$2,000	$8,000
Total Cash Down (DownPMT + Rehab)	$45,000	$42,000	$27,500
Taxes	$3,408	$2,967	$960
HOA	$900	$900	$1,440
Insurance	$643	$732	$564
Rental Income	$1,700	$1,875	$1,075
Tax/Insurance/HOA	($413)	($383)	($247)
Maintenance/Vacancy	($75)	($75)	$0
Mortgage	($630)	($553)	($339)
Operating Income $ (Rent-Fixed costs)	$1,212	$1,417	$828
Monthly NET Cash Flow $ (OI-Mortgage)	$582	$864	$489
Annual Return $ (CF x 12)	$6,984	$10,368	$5,868
Monthly Cash on Cash % (CF/Total Cash Down)	1.29%	2.06%	1.78%
1 Yr ROI % (Annual Return/Total Cash Down)	15.52%	24.69%	21.34%
Cap Rate (NOI/Price)	10.39%	10.63%	15.29%
Break-even (#YRS) (Total Cash Down/Annual Return)	6.44	4.05	4.69

@Rolanda Eldridge Nice!

@Darren Sager I am a native New Yorker, born and raised. I definitely agree NYC will always be a grade A market and a great place to invest if possible.

I'm just stating there are thousands of miles between the Atlantic and Pacific Oceans. To make such broad judgments about an entire metropolitan area based on 5-10 miles of the city is a poor assumption in my opinion.

My market is so competitive, I'm happy the media is keeping folks out. More for me :-)

Any out of towners who want a tour of the real Chicago, I am happy to connect! 

One more recent article: "There's a New Best City in America for Startups (It's Not in Silicon Valley)" http://www.inc.com/betsy-mikel/the-city-with-the-highest-percentage-of-insanely-profitable-startups-may-surpris.html

@J Scott Very Much So!!! Thanks alot!

@Darren Sager That is incorrect. Yes, tech jobs played a role to a degree in San Fran, but NYC not quite sure.

I would attribute the massively price appreciation more to international equity and housing markets after the recession. For foreign investors NYC and San Fran, is one of the safest places to invest. Many Chinese and Russian investors bought properties over asking price driving the market up.

As for Jobs, many larger companies are moving from downstate Illinois to Chicago: McDonald's, ConAgra, Caterpillar, Kraft-Heinz, Groupon, and Yelp to name a few.

Again put feet on the ground. Or just do a google search since your a tech guy. 

When you compare cost of living vs. local economy Chicago is #1 on the list compared to NYC, San Fran, LA, Denver, Seattle and MIA.

@Account Closed Wasn't Oakland once a murder Capital? Within the past 10 yrs or so? Before San Fran went crazy, now folks are pouring across to Oakland?

I tell people ALL the Time. I am from Brooklyn NY. You probably wouldn't like my "hood" back in the 80s but now tears-downs are $900K+, as Manhattan cap rates fell.

Put feet on the ground and stop watching Fox News. South side Chicago is Next!!! Always happy to show out of state investors around! :-)

@Robert ObniskiYes, Same question? if you could share your cost as a ballpark would be a big help!

@J Scott Big fan!! Thanks for the advice, Much Appreciated!

I've been struggling to understand this "All-in-Cost". Can you break down this component of the equation?

As I used ARV because i think of the BRRRRR method as a flip with much smaller profit and a note PMT at the end. But Cash flow to offset that payment. I guess i was aiming for more of a monthly $ goal than ROI. error?

I'm a BRRRRRer :-)