All Forum Posts by: Elliot Mendoza

So I've been reading the boards for a while, I am currently deployed and I refined an excel spreadsheet I had worked up before I left the states.

As of right now these are the numbers I'm looking at, and I -THINK- I have the 50% rule and 2% rent thumb rules down for the most part.

So here's my analysis:
Asking Price: Brand new quad(built dec 2012) 330k
20% down = 66k
4% interest loan, 30yrs: 1,260.38
Taxes: 583 monthly
Insurance (Allstate gave me the best quote): 72 monthly
PM: Century 21 - 1/2 months rent to fill vacancy + 10% monthly
All 4 units rent at 825: Gross rent monthly: 3,300
All closing costs payed for by builder.

So those are the base numbers, now based off the 50% Rule:
19,800 Yearly NOI
14,717 Yearly Debt Serivce (Princicple & Interest payments)
5,083 Yearly income left over, about $105 per door monthly.

Actual rent is only 1% at current rental value's (3.3k monthly)

So do I do my COC based off the 50% rule income? Then it would be 7.7% COC return per year.

So are my calculations correct? And to -me- this seems like a good deal as such. Any input would be appreciated. I have this all worked out on an excel spreadsheet and will continue polishing it up as need be to make it near dummy proof for myself.

Thanks in advance :)

Well, if I only had 50k, I'd go for flipping until I have the capital to purchase real estate with cash and still have that cash left over to rinse & repeat.

If i started at 50k, and flipped up to 500k, I'd use 370k to purchase a quadplex i saw that rented each unit for 1200/monthly. then use the left over cash to continue flipping, rinse and repeat.

Tim, I really appreciate the info. I'll have to look into this. Not sure where I'd find a notary where I'm at but it's something to go by.

I think it's a "winning" idea.

I appreciate it guys, I'm going to wait a few months to do some more homework and stack on some more cash as I just made a substantial purchase into silver the last few weeks. (At least, substantial to me).

I'll add you both as contacts and pending my communication ability in a few months, I'll start putting out feelers.

Thanks Andrea, I guess I'll have to look into it some. I know I have a ton of homework to do, and depending how these next few months are in terms of work load, I might have tons of time to study.

Well, I left my 82nd days a few years ago for EOD, but yea man, desert storm was some ****.

I do have a good chunk in silver and gold, as I've really had nothing for expenses but rent and utilities, I wanted a place to put my cash. Real estate is my next target now.

I appreciate the advice guys. Guess I got more homework to do. No team in place so kinda harder for me initially I guess.

Thanks, that all makes sense. So, if I were to stick to a market I know fairly well, it would be El Paso, TX (since I am stationed there, just currently deployed till September-ish) and the surrounding area's. Bit of Angie's list searching for home inspectors and contractors, and possibly do-able without being personally present, maybe?

Just got a few days of sitting around before I get pushed out to where I'll be doing my job. Doing a lot of thinking/reading with the extra time.

What also excites me about the lower end homes though is the ability to purchase with cash, with less than a 20% down payment on most of the 4-unit properties I've come across in/around EP.

Came across one quadplex property for 370k, each unit renting at 1200. While I have the money for 20% down, the simplicity of the lower end properties just seem better. Have cash, buy, fix, get pm, rent, collect pay checks. At least on paper, sounds like winning to me.

Hello from happy Afghany-land.

So, I've done a good bit of reading over the last month or so since I registered on here. And I'm either showing signs of an infection(I'd blame the amazing food here) or developing that itch to purchase a first investment property.

I came here interested in multi-family properties initially, but seeing some of the lower end scale homes sell for 15-40k and make a really good cash-on-cash return looks more and more appealing as my end goal would be Cashflow.

So back to my subject line; assuming I found a deal, had the cash on hand, how would I go about the purchase? Or is it even possible?

While I agree that real estate can earn you and income where as gold or silver can not. You can also lose a lot of money in real estate if you're not careful.

I've done a massive amount of study on gold and silver before I started putting money into it. I started buying them when gold was 900 and silver was 15 dollars an oz. I'm not buying much gold now, in fact I'm getting ready to switch over most of my gold to silver. It is speculation based on historical data and watching the world economy, especially our own. Silver and gold will continue to rise after this recent correction, but silver will beat out gold due to it being way under valued. At least that's my personal opinion. I personally believe that silver will hit the $50 per oz range in '13 or mid '14., while gold will pass the 2k mark, it's just that on a percentile scale, silver wins hands down.

I plan on liquidating my commodities in order to purchase real estate, it's just a matter of education before I decide what venue in RE to approach with an educated mind and an open wallet.