All Forum Posts by: Ben M.
Ben M. has started 144 posts and replied 298 times.
Post: Tax increases killing cash flow
- Houston, TX
- Posts 303
- Votes 47
Quote from @Karla Simmons:
@Ben M.
That seems like a lot - is it due to hurricanes and flooding? There are some areas in California that are more prone to fires and therefore insurance has become extremely expensive, but in the average cities and suburbs, homeowners insurance is very reasonable. We have a 3/2, 1400 sf rental that we pay $650/year in homeowners insurance. Our property tax is fairly low percentage too, but of course homes cost more here.
Hurricanes and flooding do contribute to that. Speaking of flooding there is actually an additional 750/year insurance for flooding as well since that is separate…
Post: Tax increases killing cash flow
- Houston, TX
- Posts 303
- Votes 47
Quote from @Zack Berridge:
@Effram Barrett my wife and I bought our first primary last year, so probably/school taxes are new to us. How soon can I protest property taxes? I assume I can’t protest school taxes, correct? (Wishful thinking for the cy-fair tax rates which were nearly twice that of property)
I think I was able to protest my tax right away from what I remember. I used Texas tax protest. They don’t get paid unless they lower your tax
Post: Tax increases killing cash flow
- Houston, TX
- Posts 303
- Votes 47
Quote from @Karla Simmons:
@Ben M.
Just out of curiosity, what do
You pay in homeowners insurance on an average SFH rental in your area, like a 3 bd/2 bath 1400 sq ft home?
Karla, my 2000 sq ft home is about 1800/yr. That will probably around 1400/yr
Post: Tax increases killing cash flow
- Houston, TX
- Posts 303
- Votes 47
Quote from @Nathan Gesner:
Quote from @Ben M.:
Quote from @Nathan Gesner:
If you have $100 - $200 per month cashflow, this shouldn't happen. If your taxes are $4,000 a year and they increase 20%, that's still only $67 a month. How much cashflow did you have? How big was your tax increase? When you calculate cashflow, are you setting aside a certain percentage for repairs, vacancy, and capex, or are you only counting PITI?
I would have to see some numbers. I doubt your taxes have increased more than 10%. Rent rates have increased nearly 20% over the last 24 months, so you should be ahead. Are you at market rate? How much did your taxes increase? What other costs are increasing that eat into your cash flow?
There were definitely additional expenses such as pest control, high PM fees that added to this. This being my first property I did run into quite a bit of unexpected items. My original loan payment though from back in 2019 was 750/month now it's 990/month
Post: Tax increases killing cash flow
- Houston, TX
- Posts 303
- Votes 47
Quote from @Nathan Gesner:
If you have $100 - $200 per month cashflow, this shouldn't happen. If your taxes are $4,000 a year and they increase 20%, that's still only $67 a month. How much cashflow did you have? How big was your tax increase? When you calculate cashflow, are you setting aside a certain percentage for repairs, vacancy, and capex, or are you only counting PITI?
Post: Tax increases killing cash flow
- Houston, TX
- Posts 303
- Votes 47
It is nice to have the equity from the appreciation we are having but the tax increase is killing my cash flow. I guess when looking at the equity on the back end it is still a win but this is making things a bit tricky
Post: Refinancing my mortgage
- Houston, TX
- Posts 303
- Votes 47
Thinking of refinancing my mortgage to hopefully take advantage of lower interest rates. Would it make sense to look for other vendors/lenders to get the best rates or should I try to stay with my current lender
Post: Where to go from here
- Houston, TX
- Posts 303
- Votes 47
Quote from @Wale Lawal:
I would try connecting with another wholesaler in the Houston area and seeing what they are doing. They have many Facebook groups you can join.
Post: Where to go from here
- Houston, TX
- Posts 303
- Votes 47
Hello BP community. I seem to be having a difficult time in my attempt to grow my portfolio. I have invested on my first rental property (duplex) 3 years ago. I am trying to grow my portfolio at least purchase another property but before I did this I wanted to increase my reserves by wholesaling. With sms and bandit signs being illegal in Houston I went the direct mail route and spent over 7k on a direct mail campaign. It had disappointing results and literally just had 1 possible motivated seller out of 1000 contacts and that motivated seller wasn’t even really that motivated and was just curious how much I would offer. This was a 6 month campaign and it is now over.
I am not quite sure where to go from here as far as acquiring more reserves via wholesaling or other methods. I do have savings collected from my job but I need other sources of income.
Would anyone have any advise they can share?
Post: Pest control issues and expenses
- Houston, TX
- Posts 303
- Votes 47
Originally posted by @Sherry Patterson:
@Ben M. In TX your lease states they are responsible for pest control. However, more than likely they are not going to pay for it. If it gets out of control it could cost you a lot more. You need to watch the appliances. Exterminators can not spray up into appliances and that is where they nest. So all of they spraying in the world is not going to get rid of them if they are in there. If that happens you have to get rid of the appliances, then spray multiple times to get the situation under control and then get new appliances. This will cost way more than $800 if you have to do this. The initial spray, if it is out of control already, may be more but then you should just have to do quarterly spraying. $800 is too much.
All of this being said you can bill it back to the tenants. You can send them a warning that there is an issue and it is there responsibility to take care of it as per their lease. They will need to show you proof that it has been taken care of and set up on an ongoing contract. This would require them to work together to get this done and more than likely will not happen. So instead in the notice you provide tell them that since it is their responsibility and they have not taken care of it, that you have contracted a service, give the service agreement terms, then let them know they will be billed for the service as per their lease. If they do not pay they are breaking the lease and is grounds for eviction.
Hope this helps. Happy Investing!
Wow thank you Sherry!