All Forum Posts by: Douglas Gratz
Douglas Gratz has started 17 posts and replied 63 times.
Post: How do you properly research rental markets?
- Posts 69
- Votes 12
Good morning,
So the last two threads I created had to do with how to make the numbers work in A/B class neighborhoods. A few people mentioned the research side of things, supply and demand, job growth, new business in the area , new roads, etc etc.
My question is then, how do you find the answers to these questions. Are there any good analytics programs out there for RE?
Post: I dont understand how you make the numbers work on Class A RE?
- Posts 69
- Votes 12
Thanks, yeah I Actually do not spend any of my rental income if I can help it. I want to save enough to cover a years worth expenses or more so when a recession hits I can weather it and hopefully buy properties at steep discounts!
Post: In a Nut Shell...What are your strategies?
- Posts 69
- Votes 12
@Joe Villeneuve What does one usually do when he or she can no longer refi with the bank? (10)
Post: I dont understand how you make the numbers work on Class A RE?
- Posts 69
- Votes 12
@Dan H. What would you consider over leveraged? Like taking out second mortgages and the like? I ask because I plan to keep refinancing the homes I buy at auction
Post: Purchasing Duplex's in lower income area (Need Help)
- Posts 69
- Votes 12
Originally posted by @Matthew Reid:
I have done some more research on government subsidized housing in my city and for a 2 BR they pay $735 in rent. That multiplied by 4 units is over $2900 in rental income. I was originally only going to rent each unit for $600 a month but am considering using HUD. With those rental numbers it will boost my cash flow considerably. My numbers and assumptions are below. This is once I refinance at $180,000 ARV with 5% interest.
New Loan amount: $144,000
Mortgage: $803.94
Taxes/Insurance: $230
Vacancy (10%) $290
Capital (10%) $294
Repairs (15%) $440
Management (10%) $294
Misc: $80
Cash Flow: $502
NOI: $1,905
Idont know why I cannot tag your name, so i reposted with a qoute
Post: Purchasing Duplex's in lower income area (Need Help)
- Posts 69
- Votes 12
Thats good cash flow. Whats appreciation or deprecations like in that neighborhood? Where I buy, seems to be stuck in time and all around neighboring cities, booming! I can only hope! Just make sure HUD will give you what you are anticipating.
If you are going to be able to REFI and at the rate and appraised value, in my strategy, seems like a good one
Post: Purchasing Duplex's in lower income area (Need Help)
- Posts 69
- Votes 12
Originally posted by @Matthew Reid:
@Douglas Gratz
If I assume the average cost per square foot ($45/sqft) of homes in the area it will be valued at just over $180,000.
Mind you, on properties like this, Id rather be all in for no more than 110K so I do not have any cash on the table
Post: Purchasing Duplex's in lower income area (Need Help)
- Posts 69
- Votes 12
Originally posted by @Matthew Reid:
@Douglas Gratz
If I assume the average cost per square foot ($45/sqft) of homes in the area it will be valued at just over $180,000.
Well if it appraises for that much you will get around 125k less closing costs on the loan. at 5% your payment not including insurance and tax would be around $600 .
$2400rent
-600
-100 insure
-300 taxes
-240 10% for repair
-200 misc
Cashflow $960
Total Cash out your pocket if you get the refi Around 20k
8% ROI and 57% CoC . If you can manage the low income tenants which can be harder but not always, i like the deal
Post: In a Nut Shell...What are your strategies?
- Posts 69
- Votes 12
You mean limits per institution? I find this hard to believe. I have 5 mortgages right now with one bank and 2 with another. My ROI on 6-8 is between 13-16% and CoC calculation doesnt work well because I have not had to leave any money on the table. Its usually 70-75% but I make sure to be all in low enough to where I will at-least get my money back so long as it appraised for what my comps have appraised for