All Forum Posts by: Austin Fruechting

Analyze 100... make offers to 10... close on 1. 

MO and KS are pretty landlord friendly. The biggest key will be a quality property manager, so vet them very thoroughly. 

The east side has a lot rougher areas (but can still have some good pockets).

If you're thinking about moving into it in the future and having the family right there, that's a completely separate thing for you to weight versus just comparing strict investments. 

So outside of moving back in and just looking investment, that was my question about the appreciation... you made a great return in those regards. If you sold your IRR would be through the roof for the time you've held it. And if it's going to continue then it may be worth holding, but if you see more of a plateau in that appreciation then your IRR will continue to fall as time goes on.

There are lots of markets where you can buy fully rehabbed rentals at 1-1.2%. The biggest factor though is making sure you have a great management team, and if you're buying from an actual turnkey company, make sure they do solid work. There are lots of lipsticks on pigs in the turnkey world. 

Shoot if it's around $700k value, I'd sell it and buy something else that gets $7-10k per month in rent. 

Do you think it will continue to appreciate? Or do you think you're near the top? If it's not going to keep moving upward at a fast pace, 0.3% rent to value is a terrible return. 

Couple things;

1) 50% expense rule typically includes all expenses including vacancy. You're actually running a 60% rule. 

2) 50% rule is just a very rough rule of thumb. I have properties that range from about 40-62.5%, it's all property dependent with rental price being the biggest factor... higher rents, lower expense %... that $4k HVAC costs the same wether the place rents fro $1k a month or $500 a month, but you're looking at 4 months vs 8 to pay for it. 

I don't know tax costs or anything about the property or property management costs in your area etc so do not take these numbers to mean anything... but lets just say a 4-unit in a desirable area with $4400 monthly rent under one roof/structure/lawn, maybe it could be as low as 40%... $52,800 annual rent, $31,680 NOI....

Also, any of the rent to purchase ratios are just general rule of thumbs too. 1%, 1.5%, etc... that is again going to be completely property and rent level dependent just as the 50% rule is. As the property gets nicer, more recently rehabbed, and higher rents,you get closer to the 1% and still make money.... as the property is in worse areas, more deferred maintenance, and low rents you probably have to purchase at 2% to make anything and sometimes you won't even then. 

Welcome! Make a more definitive plan than "eventually" though!

Welcome and congrats on deciding on this path!!! I started at 25 and retired at 32!

That's awesome @Jay Hinrichs !! 

Great cause. I donated, and will again after my next refinance! 

I'm not an agent... and if it doing that makes you happier than your current job go for it... but I would caution against thinking that it will provide freedom and flexibility of schedule... often being an agent means you are at the beck and call of clients/potential clients.... evening/weekend showings and open houses, etc.

cabinetgiant .com has great quality RTA cabinets at good prices. I've done 10+ kitchens using those.