All Forum Posts by: Rod Hanks

Congratulations and you would want to include 10% for repairs and 10% for vacancy. Hopefully the hvac roof plumbing and electrical are in good shape. But with so much that could go wrong on a rental, just curious why would you buy a property with negative cash flow on the purchase.

A triplex like that in LA or NY would be a couple mil but Detroit a couple hundred so really can't answer your question without knowing what city.

I input a property I own and the output surprisingly was fairly accurate. The insurance was $100 off and taxes were close but the other numbers and analysis look ok. Well done.

1. Property Basics

• Type: Single-family home

• Size: ~1,642 sq ft home on ~0.72 acres (31,360 sq ft lot)

• Bedrooms / Bathrooms: 3 bed / 2 bath

• Year Built: 1962

• Features: 2-car garage, brick fireplace, large yard backing to wooded area, pier & beam foundation

2. Neighborhood Safety & Appeal

• Area: Bruton Terrace, older Dallas neighborhood

• Safety: Average; check Dallas PD crime maps for specifics

• Nearby Amenities:

• Schools: Elementary (5/10), Middle (3/10), High (2/10)

• Recreation: Parks, pool, baseball & tennis courts nearby

• Shopping: Centers within ~1 mile

• Transit: Car-dependent, limited public transit

3. Rental Potential (Simple)

• Estimated Rent (all units): $2,100/month

• Mortgage (30 yr, 6.75%, 20% down): ~$1,492/month

• Property Taxes: ~$257/month

• Insurance: ~$100/month

• Upkeep/Maintenance: ~$200/month

Estimated Monthly Cash Flow: ~$51/month

If owner-occupied: This is a single-family, so no rental if you live there → negative cash flow (you pay all expenses).

4. Good for a Beginner?

• Yes, manageable single-family rental

• Relatively low-maintenance but age (1962) means possible repairs

• Tenants likely: families who value yard/garage space

• Not suitable for house-hacking (not multi-unit)

5. Red Flags in Plain English

• Low school ratings (2–5 out of 10)

• Older home (potential repairs: roof, plumbing, foundation)

• Car dependent, not walkable

• Cash flow margin is very slim

6. Loan Scenario Comparison

VA Loan (0% down, ~6.5%)

• Estimated Rent: $2,100

• Mortgage (VA 0% down): ~$1,453/month

• Property Taxes: ~$257/month

• Insurance: ~$100/month

• Upkeep/Maintenance: ~$200/month

• VA Funding Fee (if financed): ~$29/month

Estimated Monthly Cash Flow: ~$61/month

(~$90 if funding fee waived)

Conventional Loan (20% down, ~6.75%)

• Estimated Rent: $2,100

• Mortgage (20% down): ~$1,193/month

• Property Taxes: ~$257/month

• Insurance: ~$100/month

• Upkeep/Maintenance: ~$200/month

Estimated Monthly Cash Flow: ~$350/month

Final Verdict

• Beginner Friendly: Yes, simple to manage.

• Best Financing Choice: Conventional loan (better cash flow).

• VA Loan: Works but very slim margins unless fee waived.

• Biggest Risks: Thin cash flow, older property, average neighborhood schools/safety.

Do you want me to also make a quick “pros & cons” summary list you can paste into notes for fast reference?

@Alex Paz My question would what are your goals? Are you trying to build a rental portfolio? Are you trying to flip for cash on your next deal?

 @Matt John Theres no license for a gc in Texas so there are no potential issues with unlicensed GCs. The only license is for the trades (plumbing hvac electrical) The land is your equity in the deal if you own it outright and it appraises for the equity required you won't have to bring money to the closing table. You likely will have to pay the contractors as the work progresses and get reimbursed on the draws. Unless you have a track record with the contractors who are wiling to wait on the draws.

Congratulations! You'll hit a home run on the next one. We all have lost money on deals look at it as a lesson or tuition. On the next deal check and double check comps and repairs and only buy at 70% ARV or lower. You got this!

@Scott S. Unfortunately you just learned a hard lesson. Most home insurance policies have a 60 day vacancy clause which means between tenants you have 60 days before coverage is suspended. It's important to have a landlord policy that has a vacancy endorsement, so that the property is still covered during an extended vacancy. 

No insurance company will insure a house with cloth wiring. The fire risk is astronomical. Budget a rewire if you buy and I definitely wouldn’t live there or have a tenant stay there with cloth wiring.

@Kay Sam I usually do granite or quartz counters and lvp flooring agreeable grey paint and white trim and ceilings and cabinets. I've used the same color scheme for the past 5 years and it's probably time to change it up. 

Dallas is definitely a strong market, though prices can get steep in many of the northern areas. A good rule of thumb is to stay under a $400K ARV in neighborhoods with solid school districts.

Garland is a great city for flips, and within Dallas proper I’ve found good opportunities in pockets of 75223, 75218, and 75228. Duncanville is also a solid option, just like you mentioned. Personally, I focus heavily on South Dallas, where I keep ARVs under $300K. Those deals tend to move quickly for me.

The biggest key is sticking to the 70% ARV rule and being liberal with repair estimates. Over time, I’ve found that many wholesalers’ numbers don’t line up with reality, so I only buy based on my own analysis and never on theirs.

I’m local here in Dallas and happy to help if you have more questions.