All Forum Posts by: Gareth Fisher
Gareth Fisher has started 15 posts and replied 129 times.
Post: [Calc Review] Help me analyze this deal
- Manheim, PA
- Posts 131
- Votes 138
Without seeing the property hard to say but that rental rate seems high if it's a semi detached.
If it is a semi detached that purchase price is on the high side and pretty much a retail price
If it's a sfh, then it's probably worth pulling the trigger. Still I think I would plan on only getting 1200. Just to be safe. I would be willing to share more info in person, I know of some other deals out there as well.
Post: Build storage units or build housing?
- Manheim, PA
- Posts 131
- Votes 138
Sounds like the township already answered that question for you.
Post: Looking for advice and help, please.
- Manheim, PA
- Posts 131
- Votes 138
Biggest piece of advice I can give is don't overpay and avoid any major rehabs just starting out.
Post: Lancaster, PA market
- Manheim, PA
- Posts 131
- Votes 138
Lancaster home values combined with high property taxes leave very little cash flow.
The deals are in the surrounding areas, and secondary markets.
Feel free to pm me for more info.
Post: Assessing Debt Risk before acquiring another rental
- Manheim, PA
- Posts 131
- Votes 138
Originally posted by @Matthew McNeil:
Originally posted by @Gareth Fisher:
Originally posted by @Matthew McNeil:
Originally posted by @Gareth Fisher:
Originally posted by @Matthew McNeil:
Originally posted by @Gareth Fisher:
I'm in the process of deciding if I would like to acquire another rental property or pay down more debt. What metrics do you prefer to use when assessing the risk of adding more debt to your portfolio?
Thanks in advance.
I make sure my reserve fund provides enough padding in case of a problem.
I pay down enough debt on each property to make sure they can handle a 20% deduction if rental rates go down in my market.
I look at my spread between the market and RE to make sure I'm at balanced based on my long term strategy (I max out our ROTHs).
If those are OK, then I'll look at buying another asset which is what I'm presently doing.
Ok cool, lots of good stuff in here.
First I'm not crazy about stocks. The liquidity aspect of them, makes me prefer to trade them more month to month. The more liquid an asset is the higher risk it becomes. Throw in algos into the mix ...geez!! That being said I do have a portfolio and contributions are being made. So I have that box checked.
Cash reserves, Here it gets a little tricky for me. We have 6 months reserves for all of our rentals, and personal living expenses. However should I include my contracting companies expenses as well? Typically it's pretty cash rich and the majority of the expenses are paid for by the client/job.
Loan to value this is what I was looking at as well for a metric to gauge risk. I was however thinking 50-60 percent. How does one decide on what is a good amount?
When I look at the next 5 years I don't see how we are still in an upward trend. Of course we have been saying that for the past 5.
Do you look at Debt to Income at all? Mine is at 34 percent including taxes and insurance.
From what I understand that is considered healthy.
Thanks in advance
Sure! Your metric is well thought out.
I think the LTV ratio is ultimately up to each investor, but the number you mentioned is what I personally strive for; 50-60%.
However, several BP members would balk at that ratio with their belief that you're buying your cashflow if you go that low on LTV - an entirely reasonable argument.
Ok sounds good.
Would you include your cash reserves in your asset to debt ratio?
Thanks
Personally, I wouldn't, but that's me. Other BP members might have a different perspective. For me, the Cash Reserve is an entirely separate and autonomous entity that sits quietly on the sidelines to be tapped in the event of a crisis. I don't "include" it in any spreadsheet, DTI, Debt to Asset Ratio, LTV, or any another other aspect that would influence my decision to acquire another asset; as long as I know its sitting in a bank protected for unforseen problems.
Ok awesome thanks for your help!! Have a great day!!
Post: Assessing Debt Risk before acquiring another rental
- Manheim, PA
- Posts 131
- Votes 138
Originally posted by @Matthew McNeil:
Originally posted by @Gareth Fisher:
Originally posted by @Matthew McNeil:
Originally posted by @Gareth Fisher:
I'm in the process of deciding if I would like to acquire another rental property or pay down more debt. What metrics do you prefer to use when assessing the risk of adding more debt to your portfolio?
Thanks in advance.
I make sure my reserve fund provides enough padding in case of a problem.
I pay down enough debt on each property to make sure they can handle a 20% deduction if rental rates go down in my market.
I look at my spread between the market and RE to make sure I'm at balanced based on my long term strategy (I max out our ROTHs).
If those are OK, then I'll look at buying another asset which is what I'm presently doing.
Ok cool, lots of good stuff in here.
First I'm not crazy about stocks. The liquidity aspect of them, makes me prefer to trade them more month to month. The more liquid an asset is the higher risk it becomes. Throw in algos into the mix ...geez!! That being said I do have a portfolio and contributions are being made. So I have that box checked.
Cash reserves, Here it gets a little tricky for me. We have 6 months reserves for all of our rentals, and personal living expenses. However should I include my contracting companies expenses as well? Typically it's pretty cash rich and the majority of the expenses are paid for by the client/job.
Loan to value this is what I was looking at as well for a metric to gauge risk. I was however thinking 50-60 percent. How does one decide on what is a good amount?
When I look at the next 5 years I don't see how we are still in an upward trend. Of course we have been saying that for the past 5.
Do you look at Debt to Income at all? Mine is at 34 percent including taxes and insurance.
From what I understand that is considered healthy.
Thanks in advance
Sure! Your metric is well thought out.
I think the LTV ratio is ultimately up to each investor, but the number you mentioned is what I personally strive for; 50-60%.
However, several BP members would balk at that ratio with their belief that you're buying your cashflow if you go that low on LTV - an entirely reasonable argument.
Ok sounds good.
Would you include your cash reserves in your asset to debt ratio?
Thanks
Post: What factors contribute most to the ARV when doing a BRRRR?
- Manheim, PA
- Posts 131
- Votes 138
Originally posted by @Steven Slivinski:
@Gareth Fisher @Michael Noto @Michael Doherty Are there better strategies to consider for a first deal when I have little of my own cash reserves? BRRRR stood out to me right away because it seemed like a way to pay back a lender within a reasonable time frame without having to liquidate the deal at the end as in a flip. Although I would need two loans here for my situation. Thoughts?
Jmo but there are a ton of markets to make money in. Flipping cars,cell phones , RVs
Also keep in mind that rentals are a wealth building tool, not an income growing tool.
Rei strategies that work well for generating income would be flips,air bnbs, real estate sales, wholesaling, or other businesses associated with real estate. Plenty of things you can do start generating cash, get re license and due sales. If that's not thing and your more of a numbers guy you could start a property management business or a property maintenance business if your more hands on. Plenty of opportunities out side of over leveraging.
I agree with others house hacking is a great way to start with minimal risk.
Post: Assessing Debt Risk before acquiring another rental
- Manheim, PA
- Posts 131
- Votes 138
Originally posted by @Matthew McNeil:
Originally posted by @Gareth Fisher:
I'm in the process of deciding if I would like to acquire another rental property or pay down more debt. What metrics do you prefer to use when assessing the risk of adding more debt to your portfolio?
Thanks in advance.
I make sure my reserve fund provides enough padding in case of a problem.
I pay down enough debt on each property to make sure they can handle a 20% deduction if rental rates go down in my market.
I look at my spread between the market and RE to make sure I'm at balanced based on my long term strategy (I max out our ROTHs).
If those are OK, then I'll look at buying another asset which is what I'm presently doing.
Ok cool, lots of good stuff in here.
First I'm not crazy about stocks. The liquidity aspect of them, makes me prefer to trade them more month to month. The more liquid an asset is the higher risk it becomes. Throw in algos into the mix ...geez!! That being said I do have a portfolio and contributions are being made. So I have that box checked.
Cash reserves, Here it gets a little tricky for me. We have 6 months reserves for all of our rentals, and personal living expenses. However should I include my contracting companies expenses as well? Typically it's pretty cash rich and the majority of the expenses are paid for by the client/job.
Loan to value this is what I was looking at as well for a metric to gauge risk. I was however thinking 50-60 percent. How does one decide on what is a good amount?
When I look at the next 5 years I don't see how we are still in an upward trend. Of course we have been saying that for the past 5.
Do you look at Debt to Income at all? Mine is at 34 percent including taxes and insurance.
From what I understand that is considered healthy.
Thanks in advance
Originally posted by @Jian Lin:
@Gareth Fisher
Thanks Gareth, any specific channels that you keep tabs on?
Kwak brothers
And some guy named Phil, but there is a ton.
Post: Assessing Debt Risk before acquiring another rental
- Manheim, PA
- Posts 131
- Votes 138
Originally posted by @Dennis M.:
I’d say You are in the wrong business if your worried about debt .
Thank you for your wonderful insight. I like your cool shades in your profile pic. Nothing says "big baller" like a cool pair of sunglasses.