All Forum Posts by: Andrew Whicker

@Aaron Montague

I got higher numbers because I used a 'good' credit score on the calculator (660 - 699), but I'm pretty sure I'm better than that. I used 'very good' (700- 749) and came up with better rates, similar to the ones you are using.

@Aaron Montague

Also, I did speak with a banker at Chase and the numbers he gave me in person for a $115k loan (FHA w/ 3.5% down) were similar to the ones I am finding w/ the Chase Mortgage calculator. The banker actually did the calc's by hand, but I'd just like to mention that I think the online estimations are close to what I would get from Chase.

Okay, thanks again for the help. You're really going out of your way to give me this advice / info.

I'm using the Chase website for a mortgage calculator and I'm coming up with a 105k loan (115K house with 10k down) to be $720 / month mortgage payment (includes hazard & mortgage insurance). I'm curious how you are coming up with such a low payment. (although I'm sure you are just estimating like me)

I met with a loan officer the other day. I should give her a call again to discuss mortgage rates.

Cheers,

Okay, I like your numbers. Thanks for the help.

I'm not wanting to start a war here, but I was using the 'ol 50% rule.

Then I started discussing this with my roommate... We were thinking the 50% rule must be more for low income properties. At $800 / month, is there a different method for accounting for evictions and property damage by tenants?

It seems hard to believe (if using the 50% rule) that I would buy a house for $89k that grossed $1600 / month in revenue.

Basically, your numbers ($445 / month of expenses) show a monthly cost / monthly gross rent = $445 / $1595 = 28%. Those evictions and property damage spikes would have to be pretty damn large to bring the ratio up to 50%.

Thanks a lot for taking your time to answer my questions. I'm learning a lot.

Cheers,

Andy

Okay, so after doing a bit of math and reading, I came up with the following numbers:

Offer required to meet following numbers: $89,000 w/ $10,000 down

Cap Rate: 9.6%

COC: 10.4%

Mortgage Payment: $528 (includes Mortgage Insurance)

Expenses: 50% of Gross Rent

In other words, the property is listed as $150k and I'm supposed to go in with an offer of $89k. That doesn't sound reasonable.

Cheers,

Andy

Also, the ROI =Annual Cash flow / Cash paid

Where: Cash paid = (down payment + immediate capital)

Annual Cash Flow = (Gross Rent - Taxes - Mortgage)

Is this correct?

Okay, because I'm missing some critical information on the Triplex, I'll start with a Duplex that looks interesting. Obviously, the purchase price is negotiable. The prices shown are as is, assuming no negotiation. Also, I will be living in as an owner.

Type: Duplex (True duplex, not mother-in-law)

Units: 2

Rent: $795 / Side

SQ FT: 1100 / Side

Year Built: 1924

Mortgage Type: FHA

Purchase Price: $150,000

Down Payment: $5,250 (3.5% of Purchase Price)

Mortgage Payment: $875 (includes PMI, estimate only)

Interest Rate: 4.25%

Term: 30 year

Immediate Capital expenditure: $3000

Property Management: $159 (10% of gross rent)

Insurance: (need estimate)

Utilities (water / trash): (need estimate)

Utilities (heat / cool / elect): paid by tenant

Taxes: $119 / month

HOA: none

Vacancy: 1 side currently rented (I will be living in other side)

Note: Recently remodeled, requires minimal immediate attention.

Brick siding

What do you guys think?

Hi,

Is this a good location to post some numbers here and have some people weigh in the business deal? I am interested in a Tri-plex to own / occupy, then move out and have as an investment property.

Cheers,

Andy