All Forum Posts by: John Kent

@Leon Wang $500 per year is low for CAPEX, even on a condo. That should probably your Maintenance budget not CAPEX.

Total Annual Debt Service - Cash NOI = Net Income. If Net Income is negative then you have negative cashflow. If Net Income is positive than the monthly rental rate can go down (Net Income / 12) before reaching negative cashflow. There are a few spreadsheets in the Bigger Pockets file section that can be used to analyze your properties cashflow. You can plugin different loan numbers. https://www.biggerpockets.com/files/spreadsheets/category?page=1

I suggest using 1 (8.3%) month for vacancy in your formula. Rentals go quickly here but there is usually a rental fee to cover. 

Leon, Orlando has changed quite a bit since 2006 that information is not relevant to your recent purchase. There was a big period of distress in the market that occurred since then that would skew the data trend. Try looking back to 2012/2013. 

Over-leveraged means that you have more debt secured by the property than the current market value. You would have an appraisal completed by a local licensed property appraiser to obtain an opinion of the current market value of the property. If your loans on the property are higher than that number then you are over-leveraged. It is rather difficult to over-leverage a condo using bank financing. 

I assume that you have a property manager since you are an out of town owner. The property manager should be able to provide a cashlow report if they are managing the expenses. Negative cashflow is one of those things that you notice quickly when costs don't cover expenses. 

Happy to hear that you were able to dodge the bullet. There is a group going around teaching tax deed flipping here in FL. I brought some materials from one of their students for a rental cleanup and was screwed on the deal. While I attribute the situation to a lack of professionalism rather than an act of malice, this type of behavior seems to be endemic in the wholesaler sector of the business.

All my best to you on your future endeavours. 

@Robert Rayford were you buying from a wholesaler or the actual title holder?

@Leonardo Torrez reach out to Ryan Kopczyk he has a local title company that is investor friendly.

@David Jesse Florida is a big place. Perhaps you have a specific metro area or city in mind? Here in Orlando we do have a few homes with a mother in law suite. We also have some properties with more than one house on the lot. Usually, these are older homes and in limited supply. 

@Carlos Arjona creative finance is a broad subject. For which kind of transaction do you need professional assistance?

Welcome to the Bigger Pockets Community @Junior SaintPreux. 

You will find helpful investment calculators for rental properties under the Tools section on the website menu. 

In the books section under Education on the menu you will find a book by Brandon Turner about investing in rental properties. 

@Josh Calcanis yes, if the property isn't free and clear both parties are at risk. 

@Josh Calcanis you will want to be familiar with imputed interest for 0% financing. Although, it shouldn't be a problem for you the buyer.

The property doesn't necessarily need to be free and clear but that is the best way.

Ask the property seller if they have a loan on the property to know if there is debt. Then once under contract have a title search report completed by the attorney or closing agent for the transaction.