All Forum Posts by: Austin Fruechting

1) Agree and disagree. 

• Agree: It is a true statement that if you have ONE single family home you are negative cash flow when it's vacant however... 
• Disagree (1): that negative is already factored into your analysis and part of what your reserves are for with a SFR. It's looking month to month instead of is it cash flowing annually and longer.
• Disagree (2): if you have multiple SFR's that mitigates the monthly loss in the same way have a multifamily property does.

2) Not sure. I'd have to listen to it in context. He's probably talking about buy what you want and then find money. Similar to the people that preach it's super easy to find investors to put up all the cash if you have a great deal. In reality, it's still hard to do that without a track record. Tough to get people to believe you and trust you with their money if you aren't proven. 

3) That's just stupid to say that's the only way. 

Todd Dexheimer 's analysis seems pretty spot on to me. When I read your post Colton Sibley I projected 55% expenses, and possibly up to 60% expenses based on your information. At $22000 annual rent and 55% expenses that gives an NOI of $9,900... nearly identical to Todd's. At 60% that's an NOI of $8,800, which would be close to Todd's analysis after some of your expenses may rise (taxes, lawn/snow)

There's short term capital gains and long term (over one year). The long term are significantly less. 

In your scenario you would be taxed on the $20k profit. The purchase and leasehold improvements would be the base. 

"What do these numbers look like?"

They look incomplete! lol

What's the gross income? What comprises your $5,434 number? And what is that number? What are you factoring for expenses?

County tax records will have the owners. 

The 50% is a VERY general rule of thumb. Expenses will typically be less as a percentage on higher dollar rents. Why? Think of the cost of an HVAC service call and repair to the monthly rental amount of $2,800. That service call and repair won't be much less at a property that rents for $800, but represents a lot higher percentage of the rents. 

Awesome sauce! 

Killer job, that was a fast turnaround for something that big!

If eating clean and regularly working out is a great way to become healthy, why isn't everyone doing it?

You could look into a master lease or seller financing for a certain period of time if they'd consider it. Set it up for however long it would take to get the balance to 70-75% of the appraised value (with an additional time buffer). Then refinance them with a portfolio lender. Add value if you can during that time too (cosmetic repairs, increase rents, etc). They won't have to mess with them for that time. Their worst case is they get money from you for a while and then sell them again at full price. 

Originally posted by @Michael Swan:

Way to go @Austin Fruechting

My first 2 complexes are losers and I will be selling them pretty soon. total gross for all is about $800,000.00.  Cash flow $175,000 ( including  $15,000 other investors on one deal) We purchased all apartment complexes for a total of 4.25 million purchase price.  Of course they appraised at purchase price for about 4.3 million.  If I did not have those 2 losers we are currently selling, we would be  between $200,000 and $225,000 cash flow per year.

Swanny

 Those are nice cash flow to total rent ratios. Well done! 

My total purchase and rehab costs are right at $5mil. Total current mortgage balance $4.45mil. Total appraised value of $6.63mil. 

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These last 32 units will take 2 years to do all the value add and turn around. I'll be able to fund about 1/2 of that from the cash flow and then refinance. If nothing is sold or added in that time I should be at/around:

Total purchase and rehab costs of $5.2mil. Total mortgage balance $4.5-4.6mil. Total appraised value of $7-7.2mil.

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BTW: I'll be following up your appearance on the podcast next week!