All Forum Posts by: John Stevenson

Even using conservative numbers it just doesn't work. On top of increasing taxes and property management costs, I did not even factor in capital reserves.

Brian Nguyen, better to never invest then to invest and lose your shirt. Just be patient and keep your eyes open, a good deal will come along sooner or later.

Another option to protect the driveway after the oil stains are removed is to apply a concrete sealer. A quality siloxane concrete sealer can add years to a driveway for little cost. While a sealer will help to protect concrete from stain absorption, it's still a good idea to remove oil, gasoline, grease and other spills as soon as possible. If the concrete does discolor, pressure washing and certain cleaning chemicals will remove most stains.

I like Jack Bobeck comment about a 7-day right to cure. Sounds like good advice.

Wow, all I can say is that this must be an immaculate rental to be worried about engine oil drips. If it is in the rental agreement a letter may be called for. I do not know if I would start by sending a Notice of Violation especially if she is a good tenant. A friendly letter may be just what is needed and if nothing happens, then come on stronger.

Here are two sites that tells you how to get oil stains out of concrete driveways:
http://voices.yahoo.com/getting-oil-stains-off-driveway-most-practical-1804477.html?cat=6

http://www.ehow.com/how_5683658_oil-out-concrete-driveway.html

I agree with Jon Holdman, check out Craigs list, newspaper adds and For Rent signs. Another couple of online sources of rental information is Trulia.com, http://www.homes.com/ and http://www.apartments.com/.

I like Steve L. comment that if they cannot pay first months rent and two months for the security deposit then how will they pay the monthly payment.

If SFR is creating a better cap rate and the cash flow looks good, then I would highly recommending purchasing some cheap SFR.

Another consideration is the reversion value. When you are ready to sell the properties, which one will be easier to sell? As the mortgage restrictions lessen, more and more renters are going to be in a position to purchase a home. I believe at that time, there will be a higher demand for SFR than for MF and thus give you a greater yield on your investment.

Using a listing price is never very accurate as it only shows what the seller wants out of the house, not what the buyer is willing to pay. Nevertheless, it will give you a ballpark figure to start out. In the market area, if you can figure out what is the average discount between list price and sales price then it can help make the data more accurate.

If the town is so small and there are no comps, try going to the nearest comparable town and search there. Think like a mom and pop buyer and ask yourself if this town offers the same features as your town.

Another consideration is to ask yourself if this is an active market. If there are no sales, why? Are there any buyers? How long have the listed properties been on the market? Some small towns do not offer enough of a job market to encourage population growth. If these houses are abandoned, then you have to ask yourself why did they move?

I would hate to see you start buying up these houses and then be unable to sell them. Let me know how it goes.

There is some problems here. When you said "16 years" did you mean that is how long the loan is amortized? If so then here is the cash flow:

$14,940 :Annual Rent
- $1494 :Vacancy @ 10%
$13,446: Gross Income

- $1,345: Repairs at 10%
- $2,110: Taxes
- $1,163: Insurance
- $ 336: Utilities @ 2.5% (Covered for vacancy)
- $4,953: Total Expenses

$ 8,493: Net Operating Income
- $8789: Mortgage Payment of $732.38 x 12 Months
- $ 296: Before Tax Cash Flow.

It is going to cost you $25 out of pocket every month to own this property - that is if everything goes well. If you change the loan term to 30 years, you will bring home $183 per month. Still not overly attractive.

I just do not see how the numbers work in your favor.

If you really hate your cabinet doors, consider refacing them. You can purchase new cabinet doors and then paint the outsides to match the new doors.

Sears offers this service. Here is the link to their site to get an idea: http://www.searshomeservices.com/cabinet-refacing/improve

As to the bathroom, just paint them. They really do not look that bad, just really ugly colors. Good idea to remove the kitchen wall. That was there why? Just hope it was not load bearing.

You make a good point Mike Hasemann. Consumers tend to be short sighted and freak out as values change and bail out right at the wrong time. If they would have remembered that you need a place to live no matter what, maybe some would have just held tight until prices rebound. No instead they say, "OMG my house is worth only half of its value and I am paying on the full price. I'm not doing this, better I get foreclosed on."

What they fail to realize is that they are paying for a place to live. If you like your home and you can make the payments, wait until the market recovers. Do not hurry to sell your home if you do not have to. You will only take a greater loss.

Eric Michaels, you talked about resetting your ARM every few years. A lot of consumers do that, but do they really take into consideration the costs?

Refinancing every few years comes with closing costs, processing fees and appraisals - all eating away at what you saved with the adjustable rate.

Additionally, it encourages homeowners to pull out whatever little equity they have managed to accrue which effectively means that every time they refinance, they start paying pack almost all interest and never paying down the principle.

The flip side of the coin is that if you are a property investor looking to flip properties in less than 5 years then an ARM may have serious benefits. But an average consumer should not simply choose financing that gives them a lower payment right now, because interest rate will go up and it can cost a lot more down the road.