All Forum Posts by: Daniel Patterson

 Awesome! I love a good book! Thanks!

@Ben Leybovich @Andrew E. 

 I definitely was confused lol. Thanks for clearing things up for me! Exactly what I was looking for! 

@Stephen Hundley Thanks! That's exactly what I was wondering. What do investors actually look for (in numbers) when they consider a property. 

@Zach Mitchell @Roy N. Thanks, I'll have to check it out.

I'm starting to get a general idea of how I should look for a property that would be good to purchase, renovate, then rent out. I'm a little lost on which formulas I should use when considering a property. Things like cap rate, and appreciation and depreciation rates. 

What I'm wondering is, what are the standard formulas that an experience investor would use when considering a new property. 

You can just list what you use, and I can do the rest of the research on the formulas, and how to use them myself. IF you would like to explain them though.. go right ahead. 

Thanks

@Ujwal Velagapudi So with you properties in low income areas.. Do you see any potential for appreciation. Or does the low income area you have chosen not really have a high appreciation rate. 

I'm trying to get a basic rule. 

So;

Low income areas = Low appreciation & High cap

High income areas = High appreciation & Low cap

Would you say that's correct in your Detroit market?

@Cary F. I was looking for more of a simple answer like what @Tommy Desmond shared. Just to get an idea of what some people are paying and receiving. 

To be honest though, I'm fairly new to all the math formulas that are probably second nature to an experienced investor. I'm going to be making a new discussion asking seasoned investors which are the most common formulas they use when considering a new property to buy and then rent out. As well as how to calculate appreciation and depreciation over the coarse of a 15yr fixed mortgage, like @Justin Fox mentioned. Btw thanks Justin that was very helpful. 

Thanks @Michael S.!

@Jakub Bednarz Well generally people investing like to stay with one realtor. They build a relationship with them so that they always get the lower commission to pay and so the realtor always has them in mind if they see a hot property you might like. So it sounded like your buying one house atm and would like to purchase a second... So yes that contract would still be valid. Though, you can explain to the realtor that you would only like his services to be for one house only. He might understand that. Tell him that you intend on buying a second home, but you would like to try another realtor you were referred to by family. Hopefully then you guys can work out an exception in the buyer contract or he can just lift it. You can always talk to his manager if your unhappy. But to be honest people generally just stay with one realtor.. unless you had a bad experience with them. 

If you don't mind staying with your original realtor, and just feel bad about seeing a new home showed by another realtor, you don't need to worry. That is common in our business. Normally when you go see a home, if your not with your agent, the agent showing the house should ask if you have representation At that point you hand him your agents card and say yes. So sure there bummed that they wont get to list the house and sell it, potentially getting double the commission. They are just happy they have a chance at finding a buyer, whether its their buyer or not. The house has to get sold. And they need to get their 2% and move on to the next project.