All Forum Posts by: Douglas Pollock

@Dan Barli. Thank you. Your answers help me gauge my own expectations. It sounds like you’re normal range is in the $200 to $300 range, with a few outliers above and below those amounts. Would you say the amounts are tied to any primary variables? In other words, did they start high and trend lower, or correlate with a specific geographic area, or maybe have something to do with experience level as you progressed?

@Scott Weaner Good point. Are there better metrics? With COC = NOI / Initial investment, then is it really fair to compare the COC from year one with year 31? The cashflow increases significantly once the mortgage is paid off.

@Brandon Turner on a few podcasts mentioned a minimum standard for SFR cashflow. More is certainly better, but he used $100 as an example of what he needed for monthly cash flow from a property. For the buy and hold folks, I’m wondering what you are actually able to achieve in you areas. What’s your cashflow on your average SFR unit in 2018? I have one rental that is almost completely paid off, and would like to compare its cashflow against what other newer investors are able to achieve. I’d also like to hear what the more seasoned investors are achieving so we can compare.

@Derek Hookani interesting story. The stock photo of a new home appear misleading. I followed the link and read the story. My thought being, hey, maybe there’s a deal to be had here! I lived in Georgia for years. There’s definitely some one horse towns. Wikipedia indicates the population is dropping. The 2000 census had a population of 472. In 2016, population dropped to 444. A key metric for real estate is the population growth. With no major industry, population is shrinking to the point of nothingness. Probably a bad idea unless you can find a gem. A gem would be a while neighborhood of new homes that could be marketed as a retirement community or prepped base for a zombie apocalypse. The street view in Google shows a pretty humble town. No disrespect to the residents, but there’s a reason it’s on sale.

@Sergio L. Garza Someone replied to a similar post on a different thread. The recommendation was to contact a Real Estate attorney.

@Douglas Pollock. I forgot to add something. For the sake of comparing payoff vs cashout, comparing the yearly cash flow, ROI, COC, etc against what that equity does while having 2nd, 3rd, 4th, etc properties would absolutely give all newcomers something to ponder. Personally, I think finding, financing, buying, rehabbing, and either selling or renting a house is easy to learn. The hard part is determining how to work your money over time. Time value of money, comparing investment vehicles, etc are tougher.

@Joe Villeneuve Many people struggle to grasp the time value and risk management aspects of payoff vs. cashout. I saw a spreadsheet once that showed how money worked over time. It showed cashflow, CapEx, interest, taxes, rent (with 3% increases) over 30 or 40 years. It also included estimated (calculated) ROI, etc. For people who are choosing a more conservative path, this helps. You can add rows that show your own family, career, and investment goals or plans. In other words, if someone wants to find only a handful of deals to supplement life goals, rather than go full tilt into RE investing, they can see how it fits THEIR plan. Plenty want to dive in deep and retire off of real estate in a few years. Others, just want to have a little extra cash or cash flow later in life. If they want to keep their current career path, and time the increased cashflow with retirement, kids college, or anything else, they can plot the payoff against that date. Don’t beat me up, I know the pros (except Dave Ramsey) say leverage leverage leverage. Im In favor of havIng at least one property paid off completely as a security blanket. The advantage of seeing how a property cash flows over time is also seeing an exit point. Many take the ugly house and fix it up. Wouldn’t it be nice to rent it while CapEx is low? If you just did the roof and AC, how about not having to factor that into your CapEx?

@Drew Slew The flips (once sold) should be removed from the DTI. The oft quoted barrier seems to be 10 personal loans. A couple would have 20. Also, commercial loans are treated separately from personal loans. Portfolio lending may also be a factor. Once you factor in the private lenders, there’s a lot of room for maneuver.

@Ian Bautista I’m not sure about your area, but I don’t think it would dissuade a renter. Some may argue that a contracted tenant is a contracted tenant. Most people (families) tend to move in the summer if they have children. So, if I’m doing SFR, then I want my property to hit the market when the most renters or buyers are shopping.

@Charles A. How much will an eviction cost? How long will it take? Can you give him a lesser amount to help him get out the door?