All Forum Posts by: Dustin Beam

he's been on BPs podcast as well if you would like more of him

Thanks @Alexander Ball, that's kind of what I thought. Basically a way to manage money....as to make sure you don't overspend. Is that really an applicable philosophy to landlording? I would agree, maybe it would to marketing type expenses as those are somewhat discretionary. I don't know that I see it possible when it comes to real expenses. 

I'm not dismissing the idea entirely, just stating that to me, it's a little more abstract in this business than it might be for a business with lots of discretionary spending.

You will be required to get a commercial loan if borrowing as the LLC, at least according to all the banks I spoke to. However, you can get a commercial loan on any amount of units, including a single family home.

If he's truly a hoarder, will he actually let go of the house?

In part, I understand the concept. At least I think so. The way I take it is: Take a certain amount of the profits each month and give it to yourself.

Another way it was defined was in a recent podcast: Income - Profits = Expenses. Ok sure that sounds great, but real estate seems to have real expenses that can't be ignored and a relatively concrete income. So it seems that if you use this method, you might be deferring maintenance at the expense of tenants' happiness.

Anyone wiling to expand on how you, the landlord, take your cut first, and then determine where everything else goes?

If you're numbers are correct, you get a free house, right? As long as you think you can keep it rented, with cashflow, you have infinite ROI. Seems like a good deal to me. JMO

To me, any area with declining population seems like an area to avoid.

It violates the basic laws of supply and demand. When demand goes down for rentals, your monthly rent will be forced down and you'll likely face depreciation of property values.

@Chris Collins, I like to preface most my comments w/ "I'm not experienced" so you know to take what I say for what it's worth.

But I never understood using percent of purchase cost to estimate....really anything. CapX could vary wildly depending on how the property is set up. HVAC, roof type, 4 water heaters, single larger water heater, etc, etc, etc.

So I like doing a "real" analysis and input each item w/ average life, average cost, etc and then break that down for a monthly amount. Please see link below for a thread where you can find a pic of exactly what I did.

https://www.biggerpockets.com/forums/12/topics/293...

For what it's worth, I came up with a monthly CapX total for this single 4plex to be about $180/month (the pic in the link was for two 4plexes).

@Jeff Howard I can only tell you what several bankers told me since I'm not an experienced investor. They all (maybe 4 bankers) told me they won't count any rental income until I had a couple years experience. Once i did, they would count something like 75% of rental income. But talk to a banker to confirm.

 Well done, 30% higher is fantastic