All Forum Posts by: Gareth Fisher

Thanks for the tips. I am more or less worried that someone with an income to only afford a 1br will apartment will have the income to afford oil. I'm also concerned that the oil will increase vacancy. Does baseboard heat rent better the oil? obv minis would be better but also more expensive. I have this worry that a tenant gets in there and the doesn't fill the oil, then they use space heaters and cause a fire or pipes to freeze.

@Edward B.  

  @Jason D.

Ok,  I believe I got all of that.  But From what I reading none of these metrics are all that good for measuring my personal finances.    

I have been reading a bunch about debt.  Good debt vs bad debt.    I wanted to find some metrics to assess my risk, my overall financial standings.     I have been tracking networth, have my accounts separated.    However I am unsure what tools I should be using to measure my overall performance.   

I know banks will loan to me, just not sure I want to assume more risk until I have a better understanding of the risk I am assuming.

@Skye Anderson   Given your got your budgets in order and can manage one.  I think your on the right track.  Look for a partner/mentor  to do a flip with.   You put in the time, he takes on the debt/risk.    That way you increase your income /experience.   w/o taking on more debt.  Once your high interest rate debt is cleared, and a nest egg is established.  You will be able to start borrowing your own money, and by that time you should have enough experience to take on your own projects.     

@Edward B.    So if I'm understanding,  your reply correctly. I should be more concerned with my cash flow. or debt to income ratio then debt to asset.      If I look at just my 2 single family rentals.  My debt +taxes+insurance is around 1350.   The income is 2000.      Which gives me a debt to income ratio of .67  

From what I have read this is not a very good number.     Obv If I add in my personal income, but I don't see why I should since my rei business should pay for itself.

Hey guys,

   Been looking around and trying to do some research on debt risk.   The only measurement I could find was debt to asset ratio.   I want to make sure as I take on buy and holds that I am not putting my family at risk.     I have decided to keep 4-5 months cash reserves for every property I own.  4-5 months for my own personal budget.     I however am not sure how much leverage is to much.   Is the debt to asset ratio a good metric for this.  Mine came in at .55    which I was told is a good place to be.      I understand the basics good debt vs bad argument.   I just want to make sure I don't take on too much debt.

Managing money is the same if its a rehab budget, personal or business. I would prefer to see you improve your personal finances before taking on more problems (businesses) . Yes a flip will give your more immediate cash (in theory) then a buy and hold. However you can lose money just as easily especially being new or experienced . As you gain experience at managing budgets I would predict your ability to succeed to be a higher probability. Have you done networth worksheets? Do you know what debt to asset ratio is. IRR, or ROI. I would focus on educating yourself, improving your financials. Once your budget is solid, you have a plan for getting out of debt. Understanding money,interest rates, business principles have a greater value then money. Once a greater understanding of finances is achieved your networth will grow. You need to take a few steps back imo, and focus on educating yourself. Books, youtube, blogs etc. To answer your question. I agree with the others focus on paying off your higher interest rate debt first. Not trying to beat you up, but just by you asking this question tells me your not nearly educated enough in finances to be thinking about taking on large budget projects. The game is real, and losses happen every day. Real estate sales is a great low cost way to get your foot in the door. Flipping stuff off of craiglists, yardsales, or fb can be just as fun,profitable and educational.

I got the property at a discount.  I'm assuming because the heat wasn't split.  The numbers didn't look very good.  From my calculations, Once the heat is split and the bedroom added.  It should increase the value enough where most of my original investment can be pulled back out.

Im concerned that if I leave the one apartment oil that 

a. the tenant wont keep it filled

b. vacancy rates will shoot up

Im considering doing both units in electric baseboard and getting rid of the oil all together?

Am I over thinking this?

If your basing your happiness on the type of job you have or your networth. I would start there neither of those things will bring you happiness. Your purpose is much larger then that.

I recently acquired a 2 unit. The first floor is a one bedroom about 6-700 SQ feet. The second floor was a 1 br. However it has an attic that we are planning on converting to a br. Making it a 2 br unit. I was able to get a good price because the previous landlord never got the heat separated. He was paying the heat out of pocket, oil radiant heat. However the electrical has been upgraded and is separated. So my plan was to convert one of the units to baseboard and Leave the other oil. However my HVAC guy suggested I do a mini split on each of the units. He said it would be more efficient and then offer both ac and heat. Another friend told me mini splits have a tendency to fail. I also am considering running gas to the property and just doing it right, and adding two separate boilers, but that seems very expensive. However I have another friend who said on smaller apartments his tenants dont mind electric baseboard. Which obviously would be the most cost effective. so at this point I'm pretty confused on what to do. Any advice would be appreciated.